The collapse of oil prices in 2014 has triggered the idea of supply growth in higher-cost crude producers such as the US will slow down. On Friday, oil services firm Baker Hughes Inc. said the number of active rigs in the US fell for a record 21 weeks in a row sending the prices higher.
However, according to a survey released on Monday, China’s manufacturing industry in April shrank at its fastest pace for a year as new orders fell. The figure countered expectations for a tighter supply and demand balance this year, taking the prices down from this year’s high of $67 per barrel.
Brent crude fell 15 cents to $66.31 a barrel, after hitting a 2015 peak of $67.10, while US crude lost 23 cents and fell to $58.92 per barrel. The US benchmark hit its highest level this year at $59.90 on May 1.
Oil’s rapid decline last year was due to the glut in the oil market and the refusal by the Organization of the Petroleum Exporting Countries (OPEC) to cut the production.
However, oil has rallied more than 40 percent from a six-year low of $45.19 in January. The rally was supported by expectations of tighter future supply and demand balance, weaker dollar and the tensions in the Middle East.