Oil Falls to Near $57 on OPEC-Cuts Review, Increase in U.S. Rigs

Futures fell 0.3% in New York after climbing 2.5 percent in the previous two sessions. Drillers boosted the rig count by two to 751, a three-month high, according to Baker Hughes data on Friday. OPEC-led output curbs may end earlier than scheduled if the market re-balances by June, Kuwait’s then-oil minister said Sunday.

Oil is heading for a second yearly gain as the Organization of Petroleum Exporting Countries and its allies including Russia extend supply cuts through the end of 2018. The extension includes an agreement to review the cuts in June, raising questions of how OPEC will eventually phase out the reductions. Shale explorers have signaled they’re gearing up for a drilling surge next year as hedging rose for an eighth week to a record.

“If inventories fall a lot now, then the chance increases of OPEC phasing out cuts earlier than they have recently said,” according to Jens Pedersen, senior analyst at Danske Bank A/S. “The market is figuring out which stance to take on this. That said, it’s still a long way until the June review meeting.”

Russia is keen to end output cuts as early as possible, Issam Almarzooq, then Kuwait’s oil minister, told Bloomberg in Kuwait City on Sunday. He was replaced on Monday by Bakheet Al-Rashidi, who led Kuwait’s international refining unit. OPEC will study an exit strategy from the global accord at its next meeting in June, and prices should remain near current levels in 2018, Almarzooq said.
more at:  https://www.bloomberg.com/news/articles/2017-12-11/oil-halts-advance-near-57-as-u-s-drillers-add-rigs-to-fields

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