Oil gained for the second time in three days amid growing signs US shale oil producers are succumbing to OPEC’s quest to defend its share of the global crude market.
Futures rose as much as 1.4 percent in New York on Monday. Output from prolific US tight-rock formations will decline through next month to the lowest level since January, the US Energy Information Administration reported on Monday.
Crude stockpiles in the US, the world’s biggest oil consumer, probably dropped for a sixth week as refiners prepared to meet increased fuel demand in the summer, a Bloomberg survey showed.
Oil’s recovery from a six-year low stumbled near US$60 a barrel amid speculation the price advance since March will spur production.
On Friday last week, OPEC agreed to keep its output quota at 30 million barrels a day as it sought to defend market share against higher-cost producers. With OPEC maintaining its quota, US shale output has come under pressure to rebalance the global market.
Production from shale formations such as North Dakota’s Bakken and the Eagle Ford in Texas should fall by 1.3 percent to 5.58 million barrels a day this month, the EIA said in its monthly Drilling Productivity Report.
Output should decrease to 5.49 million a day next month, the US Department of Energy’s statistical arm predicted.
West Texas Intermediate for delivery next month climbed as much as US$0.83 to US$58.97 a barrel in electronic trading on the New York Mercantile Exchange and was at US$58.87 at 9:49am London time. The contract lost US$0.99 to US$58.14 on Monday.
Brent for settlement next month rose as much as US$1.09, or 1.7 percent, to US$63.78 a barrel on the London-based ICE Futures Europe exchange. It slid US$0.62 to US$62.69 on Monday.
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