Oil Prices Rebound

Oil prices tumbled last week, hit by the stubbornly high distillate supplies combined with rising US output reported by the EIA. US drillers added to their operational oil rigs for 14-straight weeks, extending an 11-month recovery that analysts say should result in a big jump in US shale production in May. Adding to the bearish pressure was the investor scepticism surrounding the efficacy of the OPEC-led production cuts.

Even after three months of curbs, OPEC has failed to meet its goal of pushing global supplies below the five-year historical average. Technical analysts reckon that having convincingly broken below $50.00 a barrel, US crude futures could very well slide all the way to $47.00, which presents the next visible support area. US crude for June delivery was last seen around the $49.90-mark.

Official data from Friday showed that UK retail sales posted their biggest decline in seven years during the first quarter as consumers cut back spending amid accelerating inflation. Figures compiled by the Office for National Statistics noted that the volume of retail sales contracted -1.40% in the first three months of 2017 after rising 0.80% during the fourth quarter.

It was the largest quarterly drop since the first quarter of 2010, and is likely to reinforce the view that household spending - the primary driver of British economy – has begun to slow sharply. In March alone, sales volumes shrank -1.80%, far exceeding the -0.50% dip forecast in a Reuters poll of economists. The GBPUSD pair is trending lower in early Monday trade, with the pair last seen back below 1.2800.