Monday marks the second consecutive day for oil plunge as market fails to see any immediate solution to soaring oil supplies. The pressure on the commodity came after last week’s data indicated that there is a rise in the drilling activity of the U.S. producers, which could prove to be detrimental to the world crude supplies.

OPEC is just talking
Over and above this, the absence of any input or action by the oil producers over the prospect of output freeze has also deteriorated the sentiment. Baker Hughes released data last week stating that the U.S. oil firms have added one rig during the week, which follows 12 weeks of rig count cuts. Oil rigs have declined by two-thirds over the last one year, which denotes the levels lowest since 2009. Thus, the increase in rig count last week suggests that any cut in drilling is near bottom.

During the early European hours, Brent Crude managed to add 0.34% to $41.34 while the West Texas Intermediate dipped 0.68% to $39.17. Brent had journeyed to a level near $40.50 earlier today. The buying interest in the commodity remains guarded even as the Federal Reserve has given a clear indication that the rate hike will not happen at an aggressive pace, which left a diminishing outlook for the greenback.

Bullish bets remain

PVM Oil Associates’, David Hufton, criticised the way OPEC is driving the crude prices up merely on releasing statements of potential output freeze. He based his opinion on the facts that the March 20 meeting is shifted to April 17, and there is no guarantee that OPEC members will walk the talk. Thus, Hufton suggests out of the lure of betting on oil at $40 per barrel under current circumstances.

However, investors appear to be more optimistic about the OPEC’s upcoming meet. This is evident from the fact that more money managers have upped their bets on U.S. crude. iPath S&P GSCI Crude Oil Total Return (NYSEARCA:OIL) closed the previous session 0.35% higher at $5.66.