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Hansen: Weak start to the week for WTI

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WTI crude is trading lower for a third day on rising US production and inventories as well as a slowdown in the reduction of US oil rigs, says Ole Hansen, Head of Commodity Strategy at Saxo Bank. And there are signs that prices will remain under pressure.

Australian mining giant BHP, which is active in US shale production, has announced it intends to reduce its onshore US rig count to 16 from 26 by the end of the year. At the same, BHP remains confident that its US shale production will increase by 50%.

Ole Hansen says that if this turns out to be a trend followed by some of the major US shale oil industry players, then a cut in production may take longer than many expect. This combined with rising inventories in the US is set to add pressure to WTI crude prices.