Oil down 3 percent on OPEC output hike, speculative ramp-up in Brent

Oil prices fell about 3 percent on Monday as production from the Organisation of the Petroleum Exporting Countries neared all-time peaks and record speculative buying in global benchmark Brent sparked profit-taking on last month's outsized rally.

OPEC's crude production climbed in April to 32.64 million barrels per day, close to the highest in recent history, a Reuters survey showed.

Iraq's April exports from southern fields increased, as did seaborne exports from Russia, the biggest exporter outside OPEC.

Traders also cited a bearish stockpile rise of 821,969 barrels at the Cushing, Oklahoma delivery point for US West Texas Intermediate (WTI) crude futures during the week to Apr 29.

Brent crude rose 21.5 percent in April, its largest monthly gain in seven years.

Speculator bets on higher Brent prices reached all-time peaks last week, while bullish bets on WTI futures and options rose to 10-month highs, feeding investor views prices may have risen too far, too fast.

"While such huge speculative length in the crude benchmarks isn't capable of independently reversing the strong up trend of recent months, it will certainly act to accentuate price declines," said Jim Ritterbusch of Chicago-based oil markets consultancy Ritterbusch & Associates.

Brent's new front-month contract, July LCOc1, was down $1.47 at $45.90 per barrel by 1:00pm EDT, after hitting a session low of $45.73.

On Friday, the June contract for Brent expired as the front-month at $48.13, after setting a six-month high at $48.50.

WTI CLc1 fell by $1.18 cents to $44.74 a barrel, having slipped to $44.54 earlier.

Monday's volume in Brent was visibly lower with the market in London closed for the May Day holiday.

The premium until Friday in Brent's front-month versus second-month LCOc1-LCOc2, known as "backwardation", also ended, with a discount, or "contango", now in its place.

"We would not be surprised to see the rally pause for breath soon and feel that the risks currently lie more to the downside," London-based Capital Economics said in note.

"We are leaving our end-2016 forecasts (for both Brent and WTI) at $45 per barrel, slightly below today's levels."