Oil prices drop on rise in US drilling

Oil prices fell on Monday, with alreadybloated markets pressured by rising US drilling activity and steady supplies from OPEC countries despite touted production cuts.

Prices for benchmark Brent crude futures were 0.68 percent below their last settlement at 2: 46 pm Beijing time, trading at $ 51.41 per barrel.

US West Texas Intermediate crude futures were down 0.94 percent at $ 48.32 a barrel.

Traders said that prices came under pressure from rising US drilling and ongoing high supplies by the Organization of the Petroleum Exporting Countries ( OPEC), despite its pledge to cut output by almost 1.8 million barrels per day ( bpd) together with some other producers like Russia.

“There is good, strong momentum to the downside,” futures brokerage CMC Markets said in a note on Monday.

US drillers added 14 oil rigs last week, bringing the total count up to 631, the most since September 2015, energy services firm Baker Hughes Inc said.

Sukrit Vijayakar of energy consultancy Trifecta said the rising drilling activity was “reinforcing the expectation of higher US production offsetting [ OPEC’s] supply cuts.”

US oil output has risen to more than 9.1 million bpd from below 8.5 million bpd in June 2016.

Reacting to the ongoing glut in markets, financial oil traders cut their net long US crude futures and options positions in the week to March 14, the third consecutive reduction, the US Commodity Futures Trading Commission said on Friday.