Oil rises on signs low prices crimping US output though economic worries weigh
SEOUL: Oil prices rose more than one per cent on Monday on signs that the recent price plunge may start crimping supply from the US, currently the world’s biggest oil producer, though concerns about global economy continues to weigh.
International benchmark Brent crude LCOc1 futures rose 60 cents, or 1.1 per cent, to US$ 54.42 a barrel at 0408 GMT.
Prices climbed to as high as US$ 54.66.
US West Texas Intermediate ( WTI) crude futures were up 37 cents, or 0.8 per cent, to US$ 45.96 a barrel after earlier climbing to as high as US$ 46.24.
Crude prices rebounded from a sharp declines last week. Brent fell 11 per cent for the week, dropping to its lowest since September 2017 on Friday, while WTI also dropped 11 per cent last week, its worst weekly performance since January 2016.
Both benchmarks down more than 35 per cent from their recent peaks in early October.
The price plunge has caused US shale oil producers to curtail drilling plans for next year.
The boom in US shale output has boosted the country into the top producer spot over traditional suppliers Saudi Arabia and Russia. The industry is at the centre of US President Donald Trump’s calls to boost the country’s energy independence.
“In the short term, it doesn’t seem oil prices would drop further because WTI has broken the US$ 50 resistance level and US President Trump would not want to see WTI falling further to support US shale industry,” said Kim Kwang-rae, a commodity analyst at Samsung Futures in Seoul.
Stil l , the macroeconomic picture and its impact on oil demand continue to pressure prices. Global equity markets have plunged amid concerns of slowing trade flows, especially with the trade war between the US and China, the world’s two biggest economies. — Reuters