Oil price falls $1 on US drilling and Opec output

Oil fell more than $1 a barrel to below $56 yesterday as a rise in US drilling and higher OPEC output put the brakes on a rally that had helped prices to register their biggest thirdquarter gain in 13 years.

Iraq announced its exports rose slightly in September while OPEC overall boosted output, a Reuters survey showed.

In its report on Friday, General Electric Co’s Baker Hughes energy services firm said drillers added six oil rigs in the week to 29 September, bringing the total count up to 750.

“We’ve seen them add rigs for the first time in seven weeks, so that changes sentiment as well,” said John Tjornehoj, energy market analyst at CHS Hedging.

Oil notched a third-quarter gain of about 20 per cent, the biggest thirdquarter increase since 2004.

In February oil industry sources said Saudi Arabia would like to see oil at about $60 level. The oil price was riding high at $115 in the summer of 2014, before slumping to $27 in January 2016, since when it has recovered somewhat.