Futures in New York are up 3.7 percent this month, even after a 1 percent drop on Monday, following data that showed an increase in U.S. drilling activity. A potential withdrawal in May by U.S. President Donald Trump from a 2015 nuclear deal between world powers and Iran would reimpose sanctions on the Middle Eastern producer and curb its exports. Meanwhile, OPEC is trimming output even after concluding it has cleared 97 percent of the surplus that has weighed on prices.
“Obviously the rig count that came on Friday was quite bearish,” says Torbjorn Kjus, chief oil analyst at DNB Bank ASA. “There’s a lot of profit in the books here for the non-commercials. You shouldn’t be surprised if there’s a $5 flush out and some profit taking.”
In the U.S., working oil rigs rose by five last week to 825, the highest level since March 2015, according to data from Baker Hughes. The rig fleet has expanded throughout the entire month of April, adding a total 28 units. Investors are assessing if surging U.S. production, which has topped 10 million barrels a day every week since early February, will undermine efforts by the Organization of Petroleum Exporting Countries to balance the market via output cuts.
more at: https://www.bloomberg.com/news/articles/2018-04-30/oil-holds-losses-near-68-as-u-s-rigs-expand-to-three-year-high