Oil price slips to $53 on rising US shale output
hong kong — Oil traded near $53 a barrel after drilling in the US climbed to the highest in more than a year, countering Opec’s efforts to clear a supply glut.
Futures were little changed in New York after falling 1.1 per cent on Friday. Rigs targeting crude in the US rose last week to the most since November 2015, according to Baker Hughes, while American crude output is at the highest since April, government data shows. Oil supplies from Opec are sliding this month, according to tanker-tracker Petro-Logistics.
Oil has fluctuated above $50 a barrel since 11 nations including Russia last month joined with the Organisation of Petroleum Exporting Countries to trim supply. While Saudi Arabia says more than 80 per cent of the targeted
Yet another good shale oil week. Opec’s decision to cut production has lifted prices and this will accelerate the revival of US shale oil production Bjarne Schieldrop, chief commodities analyst at SEB AB
cuts have been implemented since the deal took effect on January 1, the International Energy Agency predicted a gain in US shale output as prices rise.
“Yet another good shale oil week,” said Bjarne Schieldrop, chief commodities analyst at SEB AB in Oslo. “Opec’s decision to cut production has lifted prices” and this “will accelerate the revival of US shale oil production.”
West Texas Intermediate for March delivery dropped as much as 33 cents to $52.84 a barrel on the New York Mercantile Exchange and was at $53.16 at 10.00am in London. Total volume traded was about 26 per cent below the 100-day average. The contract slid 61 cents to $53.17 on Friday.
Brent for March settlement, which expires Tuesday, fell 9 cents, or 0.2 per cent, to $55.43 a barrel on the London-based ICE Futures Europe exchange. The global benchmark crude traded at a premium of $2.27 to WTI. The more-active April contract lost as much as 47 cents to $55.32.
The US drill rig count climbed by 15 to 566 last week, according to data from Baker Hughes on Friday. Explorers have added machines for eight months, the longest run since September 2014. American crude production is at 8.96 million barrels a day, according to the Energy Information Administration. — Bloomberg