Oil falls below $56 over output concerns

Oil fell more than $1 (Dh3.67) a barrel to below $56 yesterday as a rise in US drilling and higher Opec output put the brakes on a rally that saw prices score their biggest third-quarter gain in 13 years.

US energy companies added oil rigs for the first week in seven and Iraq announced its exports rose slightly in September when Opec overall boosted output according to a Reuters survey.

Big quarterly increase

Brent crude, the global benchmark, was down $1.03 at $55.76 a barrel at 1140 GMT. It notched up a third-quarter gain of around 20 per cent, the biggest third-quarter increase since 2004 and traded as high as $59.49 last week.

“I think it’s going to be a struggle to move above $60 Brent,” said Olivier Jakob, oil analyst at Petromatrix.

US crude was down $1.07 at $50.60. The US benchmark posted its strongest quarterly gain since the second quarter of 2016.

The rally was driven by mounting signs a threeyear supply glut is easing, helped by a production cut deal by global producers led by the Organisation of the Petroleum Exporting Countries (Opec). ICE Brent Crude