Oil Falls as OPEC Output Curbs Offset by Growth in U.S. Drilling

Futures slid as much as 2.1 percent in New York after rising 3.2 percent the previous three sessions. Gulf oil producers Saudi Arabia, the United Arab Emirates, Qatar, Oman and Kuwait are implementing the cuts they promised, Nawal Al-Fezaia, Kuwait’s OPEC governor, said in an interview Monday in Kuwait City. Still, that wasn’t enough to revive prices after data from Baker Hughes Inc. on Friday showed that U.S. drillers added rigs for the 10th straight week to the highest level in a year.

“The higher oil price level means that drilling for shale oil is being stepped up again in the U.S.,” analysts at Commerzbank AG led by Eugen Weinberg in Frankfurt said in a report. “This is likely to lead to rising U.S. oil production.”

West Texas Intermediate for February delivery lost as much as $1.14 to $52.85 a barrel on the New York Mercantile Exchange and was at $52.99 at 12:22 p.m. in London. Total volume traded was about 18 percent below the 100-day average. The contract rose 23 cents to $53.99 a barrel on Friday to cap a fourth weekly gain.

Brent for March settlement fell as much as $1.25, or 2.2 percent, to $55.85 a barrel on the London-based ICE Futures Europe exchange. The global benchmark crude traded at a premium of $2.15 to March WTI.

U.S. drillers boosted the rig count by four to 529 last week, according to data Friday from Baker Hughes. It’s the highest level since the week ended Jan. 1, 2016. Companies have added more than 100 rigs since the end of September.
more at:  https://www.bloomberg.com/news/articles/2017-01-08/oil-halts-below-54-as-rising-u-s-drilling-damps-saudi-cuts

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