Oil has bottomed as producers are 'capped out': RBC

RBC says oil has bottomed

The fact that crude futures didn't sell off after major oil producers failed to reach an agreement to cap production last week is another sign the commodity has bottomed, RBC Capital Markets' Helima Croft said Monday.

"The supply picture is improving. U.S. production is coming down significantly," RBC's head of commodities research told CNBC's "Squawk Box." "The overhang is being eliminated, and so we are talking about a movement to $50" a barrel.

A worker adjusts the valve of an oil pipe at West Qurna oilfield in Iraq's southern province of Basra.
US crude production falls below 9 million barrels per day

Last week, U.S. crude rose more than 8 percent and international benchmark Brent finished up 4.6 percent.

The advances came after Saudi Arabia scuttled a proposed deal among oil producers to freeze production at January levels. The kingdom insisted Iran participate, but Tehran had long said it would not turn off the taps until its output returned to presanctions levels.

Croft said top oil producer Russia cannot add much more output, and Iran is likely just 100,000 to 150,000 barrels from its goal, after adding about 400,000 already.

"Everybody in this market is pretty much capped out, so when they say they're going to bring it on, there's not much more to bring on at this point," she said.

To be sure, Neil Atkinson, head of the oil industry and markets division at the International Energy Agency, told CNBC last week he believes Saudi Arabia and Russia will continue to "pump as much oil as possible."

Oil pumping gear at the Mamontovskoye oil field in the Khanty-Mansi region of Russia.
Russia, Saudi Arabia to pump as much as possible: IEA expert

As for Iran, a deputy oil minister for the country said output could return to presanctions levels by June, Reuters reported. That time frame aligns with a scheduled OPEC meeting, potentially positioning Iran to participate in a freeze deal.