Until Thursday, U.S. crude had been outperforming Brent for nine of 10 sessions, narrowing Brent's premium to U.S. crude <CL-LCO1=R> to a 2-1/2 year-low of $1.32 on Thursday. It widened out to $3.46 on Monday before closing at $2.77.
Dow Jones news wires, citing unnamed sources, reported on Monday that the Organization of the Petroleum Exporting Countries could cut its 30 million barrel-per-day (bpd) production by 500,000 bpd in December, which traders said also may have bumped Brent a bit.
"That may have had a little impact on Brent crude, but it's a long time until December, and OPEC will often send out trial balloons by unnamed sources and see how the market reacts," said Phil Flynn, an analyst at Price Futures Group in Chicago.
THE BULLS ARE BACK
Hedge funds and other large speculators have piled in to catch the upside. Data from the IntercontinentalExchange (ICE) showed that speculators increased net long positions in Brent crude oil futures in the week to July 9.
On Friday, U.S. Commodity Futures Trading Commission (CFTC) data showed money managers boosted their net long U.S. crude oil futures and options positions to the highest since record bullish bets were set two years ago.