After early year slump, crude oil returns to profit

Oil price rises have made US shale oil production profitable

Oil markets edged up on Monday, thanks to a drop in the number of U.S. rigs drilling for more production, easing concern about oversupply.

Futures fell 1.1%, and April futures slipped below May contracts.

The split is driven by differing views over whether $70 a barrel would send USA shale companies into a production frenzy that could cause prices to crash.

Broader markets were roiled by U.S. President Donald Trump's decision to go ahead with tariffs in imported steel and aluminum, sparking fears of a trade war.

Official weekly US crude oil production and inventory figures are due to be published by the Energy Information Administration (EIA) later on Wednesday.

"There is a good chance you will get a new all time record in production", Bob Yawger, director of futures division at Mizuho Securities, said in a phone interview.

As crisis-stricken Venezuela is struggling with a steep decline in its oil production, India's average oil imports from the Latin American OPEC member have slumped over the last few months to their lowest level since 2012, Reuters reported on Tuesday, quoting industry and shipping sources.

Opec and a group of other producers led by Russian Federation have been withholding production since the start of 2017 to prop up prices.

Futures in NY were little changed after surging 3.2 percent Friday. The spread between the first two contracts settled at minus 4 cents, the first time it closed at a discount since January 22.

Brent crude futures were at $65.58 a barrel, up 9c or 0.1% from their previous close. The global benchmark traded at a $3.60 premium to May WTI. The Permian basin is seen leading the way with an 80,000/bbl increase.

That expected increase would top the 105,000 bpd climb in March from the previous month, to what was then expected to be a record high of 6.82 million bpd, the EIA said.

The EIA is due to publish its latest weekly US production data on Wednesday.

Support on Wednesday came from a report that USA crude inventories are not rising as much as expected during the spring season that is starting, implying healthy demand. Workers at Libya's Zawiya oil-export terminal started a strike on Monday over delayed salary payments, according to people with knowledge of the matter.