Oil rally to reverse amid US supply

London

THE rebound in oil will reverse because rising US production is deepening the global supply glut, according to UBS, Bank of America Corp and Commerzbank.

Brent futures entered a bull market this month as US drillers stopped using a record number of rigs, companies cut at least US$40 billion from spending plans and hedge funds turned the most bullish in seven months. None of that will stop Brent slipping back to US$45 a barrel or lower within the next three months, from about US$61 now, the banks' analysts say. Prices fell as low as US$45.19 on Jan 13.