Oil holds at $47, traders look toward Q2 lull

SINGAPORE (Reuters) – Oil prices stuck near $47 a barrel on Monday as traders were torn between the seasonal ebb of demand in the second quarter and the constant threat of an OPEC output cut.
With the northern hemisphere winter drawing to a close and U.S. crude and gasoline inventories healthy, some dealers expect a period of weakness, although new forecasts for tighter-than-expected conditions over this year tempered any bearish impulses.

U.S. oil prices fell 16 cents to $47 a barrel, erasing Friday’s 6-cent rise and sticking to the middle of their $45-$50 range of the past five weeks.

“Demand (for heating oil) is getting softer now and it’s too early for gasoline futures to lead the market,” said a futures broker based in Tokyo.

Prices bounced off a one-month low of $44.60 a barrel last week after the International Energy Agency adjusted its forecasts for this year, raising its expectation for demand growth while trimming incremental supply outside of OPEC.

Those changes point to more oil from the Organisation of the Petroleum Exporting Countries (OPEC), but the cartel remains more focused on a feared slowdown in second-quarter demand.

Reuters South Africa