Oil stable on lower US rig count, but below recent highs
SINGAPORE: Oil prices were stable on Monday, supported by a slight decline in the number of US rigs drilling for new production, with crude holding just below near three-year highs reached last week. US West Texas Intermediate (WTI) crude futures were at $61.50 a barrel at 0800 GMT, 6 cents above their last settlement. Futures reached $62.21 last week, the most since May 2015. Brent crude futures were at $67.66 a barrel, 4 cents above their last close. Brent hit $68.27 high last week, the highest since May 2015. Traders said the gains were due to a slight decline in the number of US rigs drilling for new production, which eased by five in the week to Jan. 5 to 742, according to data from oil services firm Baker Hughes. Despite this, US production is expected to break through 10 million barrels per day (bpd) very soon, largely thanks to soaring output from shale drillers. Only top producers Russia and Saudi Arabia produce more. “The US oil price is now into a range that is anticipated to attract increased shale oil production,” said Ric Spooner, chief market analyst at CMC Markets in Sydney. “Traders may decide that discretion is the better part of valour while markets wait on evidence of what happens to the rig count and production levels over the next couple of months.”
Published in Daily Times, January 9th 2017.