Original Article Appears at Yahoo! Finance via Reuters | by Scott DiSavino

Oil fell on Monday as ample U.S. supplies and excess speculative length outweighed OPEC output curbs and rising tensions between the United States and Iran. Brent (LCOc1) futures fell $1.09, or 1.9 percent, to settle at $55.72 a barrel, while U.S. West Texas Intermediate crude (CLc1) lost 82 cents, or 1.5 percent, to close at $53.01. That was the lowest close for both contracts since Jan. 31.

The Brent premium over WTI (WTCLc1-LCOc1) narrowed to $2.09 a barrel at the close, its smallest since Jan. 19. “We feel that the bulk of the price decline related to the larger-than-expected increase in net WTI speculative length as well as another hefty increase in the (U.S.) oil rig count,” Jim Ritterbusch, president of Chicago-based energy advisory firm Ritterbusch & Associates, said in a note.

Ritterbusch and others also said the crude decline was associated with weakness in gasoline futures. U.S. gasoline futures (RBc1) fell 2.8 percent on Monday. Hedge funds and other speculators boosted their bullish bets in U.S. crude futures and options in the week to Jan. 31 to the highest level on record…

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