Oil fell for the first time in four days as an increase in U.S. drilling activity fanned speculation that OPEC production cuts could revive output in North America.
Futures slid as much as 2.1 percent in New York after rising 3.2 percent the previous three sessions. Gulf oil producers Saudi Arabia, the United Arab Emirates, Qatar, Oman and Kuwait are implementing the cuts they promised, Nawal Al-Fezaia, Kuwait’s OPEC governor, said in an interview Monday in Kuwait City. Still, that wasn’t enough to revive prices after data from Baker Hughes Inc. on Friday showed that U.S. drillers added rigs for the 10th straight week to the highest level in a year.
Oil last year capped its biggest annual gain since 2009 as the Organization of Petroleum Exporting Countries and 11 other nations agreed to curb output starting Jan. 1 in an effort to trim a global inventory glut. While producers from Iraq to Kuwait say they have started to curb supply, an increase from countries such as Libya, which is exempt from cuts, could put pressure on prices.
“The higher oil price level means that drilling for shale oil is being stepped up again in the U.S.,” analysts at Commerzbank AG led by Eugen Weinberg in Frankfurt said in a report. “This is likely to lead to rising U.S. oil production.”
West Texas Intermediate for February delivery lost as much as $1.14 to $52.85 a barrel on the New York Mercantile Exchange and was at $53.01, down 98 cents at about 7:50 a.m. Central.
Brent for March settlement fell as much as $1.25, or 2.2 percent, to $55.85 a barrel on the London-based ICE Futures Europe exchange. The global
Brent for March settlement fell as much as $1.25, or 2.2 percent, to $55.85 a barrel on the London-based ICE Futures Europe exchange. The global benchmark crude traded at a premium of $2.15 to March WTI.
U.S. drillers boosted the rig count by four to 529 last week, according to data Friday from Baker Hughes. It’s the highest level since the week ended Jan. 1, 2016. Companies have added more than 100 rigs since the end of September.
Russian oil output fell to 11.114 million barrels a day in the period from Jan. 1 to Jan. 8, from 11.247 million a day in October, according to data from the Energy Ministry’s CDU-TEK unit. Niger Delta Avengers will resume attacks on Nigerian oil facilities, a spokesman for the group said in a statement on a website. Libya is working to re-open more oil fields, including El-Feel, National Oil Corp. Chairman Mustafa Sanalla said in a statement on the state-run company’s website. The worldwide oil and gas rig count increased by 94 to 1,772 in December, the highest since January, according to Baker Hughes Iraq’s oil exports from its southern ports reached a record average high in December, Oil Minister Jabbar Al-Luaibi said in an e-mailed statement.