Oil falls after failed North Korean missile test, US rig count gains

TOKYO: Crude oil fell on Monday in quiet trading after the three-day Easter break on signs the US is continuing to add output, undermining the Organization of the Petroleum Exporting Countries (OPEC) efforts to support prices, and as the market digested North Korea’s failed missile launch on Sunday.

Benchmark Brent crude futures were down 56 cents at US$55.33 at 0618 GMT (2.18 a.m. ET). On Thursday, before major markets closed for the holiday break, they settled up 3 cents at US$55.89 a barrel.

US West Texas Intermediate (WTI) crude futures were down 51 cents at US$52.67 a barrel, after rising seven cents to US$53.18 on Thursday.

Both benchmarks last week rose for a third consecutive week, with Brent adding 1.2 per cent over the four days before the Good Friday holiday and WTI up 1.8 per cent.

Trading was subdued to start the week with major market center London still closed for the Easter holidays on Monday.

While markets are braced for the possibility of more geopolitical tensions over North Korea, the attempted launch on Sunday of a ballistic missile fizzled as the projectile blew up almost immediately.

“The drop in tensions following North Korea’s failed missile test ... have seen oil fade in Asia,” said Jeffrey Halley, senior market analyst at futures brokerage OANDA in Singapore.

“The soft US CPI (consumer price index) on Friday will ease yields further, also undermining the reflationist markets such as oil and precious metals,” he said.

Retail sales in the US fell for a second straight month in March and consumer prices dropped for the first time in just over a year, official data showed on Friday.

In the oil patch, US drillers last week added rigs for a 13th straight week, a sign output gains there will continue.

Energy services firm Baker Hughes said on Thursday drillers added 11 oil rigs in the week to April 13, bringing the count up to 683, highest in about two years. — Reuters