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Oil turns negative amid worries over increased U.S. drilling

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Oil prices turned lower in European trading on Monday, erasing strong overnight gains as rising U.S. shale production continued to feed concerns about a global supply glut.

The U.S. West Texas Intermediate crude June contract lost 10 cents, or around 0.2%, to $46.12 a barrel by 3:55AM ET (07:55GMT). The U.S. benchmark touched its lowest since November 14 at $43.76 on Friday.

Elsewhere, Brent oil for July delivery on the ICE Futures Exchange in London dipped 9 cents to $49.01 a barrel. The global benchmark sank to $46.64 on Friday, a level not seen since November 15.

Oil rose more than 1.5% during Asian hours on expectations that an OPEC-led production cut will be extended into the second half of the year.

In November last year, OPEC and other producers, including Russia agreed to cut output by about 1.8 million barrels per day between January and June, but so far the move has had little impact on inventory levels.

A final decision on whether or not to extend the deal beyond June will be taken by the oil cartel on May 25.

Crude has been under pressure in recent weeks amid fears that an ongoing rebound in U.S. shale production is derailing efforts by other major producers to rebalance global oil supply and demand.

Oil prices lost about 6% last week, the third straight weekly decline, marking the longest losing streak since November.

U.S. drillers last week added rigs for the 16th week in a row, data from energy services company Baker Hughes showed on Friday.

The U.S. rig count rose by 6 to 703, extending an 11-month drilling recovery to the highest level since August 2015, implying that further gains in domestic production are ahead.

Elsewhere on Nymex, gasoline futures for June declined 0.7 cents, or nearly 0.5%, to $1.503 a gallon, while June heating oil was little changed at $1.436 a gallon.

Natural gas futures for June delivery inched down 2.2 cents to $3.244 per million British thermal units.

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