Oil prices dip

Reuters

Singapore

Oil prices dipped on Monday, weighed by global oversupply and slowing economic growth, although the prospects of falling production lent crude some support.

U.S. crude futures were trading at $38.28 per barrel at 0615 GMT, down 22 cents from their last settlement.

Morgan Stanley said on Monday that "hedging plus storage" was capping U.S. crude prices, meaning that traders were selling futures to hedge forward production and storage which will pressure prices.

They added that prices "will struggle to break $45 in the front, even if the USD continues to pullback."  Brent futures were down 7 cents at $40.32 a barrel.

While Morgan Stanley said that oil prices had likely bottomed out, it warned that a slowing economy and high production would prevent sharp rises.