Crude futures dipped toward $47 a barrel on Friday on concerns that a persistent global glut of crude oil and refined products will impede any price recovery. Losses were capped by slightly better-than-expected Chinese economic data reflecting government efforts to stabilize growth as well as a drop in Chinese domestic production. Brent crude futures were down 16 cents at $47.21 a barrel at 1140 GMT, trimming earlier sharper losses. U.S. West Texas Intermediate (WTI) futures were down 18 cents at $45.50 a barrel.
Futures fell as much as 1.2 percent in New York after adding 1.7 percent Friday. OPEC and its allies including Russia last week agreed to keep supply cuts in place and beefed up the extension with the inclusion of Nigeria and Libya. Executives from three of the biggest independent U.S. drillers said that while they won’t increase activity just because prices rise, they’ll still grow.
Oil has advanced for the past three months amid optimism that output cuts by Organization of Petroleum Exporting Countries and its partners are helping to balance the market. Yet U.S. rivals have been expanding their operations, with drillers adding two oil rigs to reach 749 last week, the highest level since late September, according to Baker Hughes.
“The OPEC deal will mostly work for non-OPEC,” said Eugen Weinberg, head of commodities research at Commerzbank AG in Frankfurt. “Even if OPEC delivers the cuts promised, and prices stay high long enough, the main result will be that U.S. shale adds on close to 1 million barrels a day of additional production.”
Pioneer Natural Resources Co., Parsley Energy Inc. and Newfield Exploration Co. said that, while they plan to grow, their emphasis will be on maintaining spending discipline and generating profit, rather than just boosting supply on higher oil prices. Pioneer plans to raise output to more than 1 million barrels of oil equivalent a day by 2026 from about 300,000 a day this quarter.
more at: https://www.bloomberg.com/news/articles/2017-12-04/oil-holds-gains-near-58-after-opec-vow-to-extend-output-cap