Tue, Dec 12, 2017 - Page 10 News List

Oil halts advance as US drillers add more rigs

Bloomberg

Oil halted gains near US$57 a barrel as US drillers expanded the crude rig count to a three-month high, potentially countering efforts by OPEC and its allies to drain a global glut.

Futures were little changed in New York after climbing 2.5 percent in the previous two sessions.

Drillers boosted the rig count by two to 751 for a third weekly advance, according to Baker Hughes data on Friday last week.

OPEC-led output curbs might end earlier than scheduled if the market rebalances by June, Kuwaiti Minister of Oil Issam al-Almarzooq said on Sunday.

Oil is heading for a second yearly gain as OPEC and its allies — including Russia — extend supply cuts through the end of next year.

Shale explorers have signaled they are gearing up for a drilling surge next year as hedging rose for an eighth week to a record.

“We think the oil price will be stronger next year looking at demand and compliance by OPEC to output cuts,” said David Lennox, a commodity analyst at Fat Prophets in Sydney. “How strong will be dependent how much extra oil we see coming from the US, that’s really the wild card for the market.”

West Texas Intermediate (WTI) for January delivery was at US$57.32 a barrel on the New York Mercantile Exchange, down US$0.4, at 7:50am in London after falling as much as 0.6 percent earlier.

Total volume traded was about 11 percent below the 100-day average.

Prices on Friday last week rose US$0.67 to US$57.36, trimming the weekly loss to 1.7 percent.

Brent for February settlement fell US$0.1 to US$63.39 a barrel on the London-based ICE Futures Europe exchange after sliding 0.5 percent last week. The global benchmark traded at a premium of US$5.99 to February WTI.

Russia is keen to end output cuts as early as possible, al-Almarzooq told Bloomberg in Kuwait City.

OPEC will study an exit strategy from the global accord at its next meeting in June, he told reporters later, adding that oil prices should remain near current levels next year.

While oil product inventories are rising, the small buildup will be offset by a decline in crude stockpiles, United Arab Emirates Minister of Energy Suhail al-Mazrouei said at a conference in Kuwait.

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