Oil edges up towards $49,
U.S. drilling slowdown supports
Send a link to a friend
[July 17, 2017]
By Alex Lawler
LONDON (Reuters) - Oil edged up to around
$49 a barrel on Monday as a slowdown in the increase of rigs drilling in
the United States eased concern that surging shale supplies will
undermine OPEC-led cuts.
U.S. drillers added two oil rigs in the week to July 14, bringing the
total to 765, Baker Hughes <BHGE.N> said on Friday. <RIG-OL-USA-BHI> Rig
additions over the past four weeks averaged five, the lowest since
November.
"The slowing pace of increases combined with massive drawdowns last week
on both official crude inventory numbers from the U.S. probably explains
the positive sentiment in general at the moment," said Jeffrey Halley at
brokerage OANDA.
Brent crude <LCOc1>, the global benchmark, was up 7 cents at $48.98 a
barrel by 1051 GMT. U.S. crude <CLc1> traded at $46.55, up 1 cent.
Oil prices are less than half their mid-2014 level because of a
persistent glut, even after the Organization of the Petroleum Exporting
Countries, plus Russia and other non-members started a supply-cutting
pact in January.
U.S. crude oil inventories in the week to July 7, the most recent,
dropped the most in 10 months, raising expectations that a long-awaited
market rebalancing is under way.
[to top of second column] |
A man pumps petrol for his car at a petrol station in Hanoi, Vietnam
December 20, 2016. REUTERS/Kham/File Photo
While the OPEC-led cuts have offered prices some support, rising
supplies from Nigeria and Libya, two OPEC members exempt from the pact,
have weighed on the market, as has growth in U.S. shale production.
Kuwait said on Friday the market was on a recovery track due to rising
demand and that it was premature to cap Nigerian and Libyan output. An
OPEC and non-OPEC committee meets in Russia on July 24 to discuss the
impact of the deal.
In a sign of strong demand, data on Monday showed refineries in China
increased crude throughput in June to the second highest on record. OPEC
is hoping higher demand in the second half will get rid of excess
inventories.
"There is almost an agreement that the second half of the year should be
tighter than the first half due to significant jumps in demand
forecasts," oil broker PVM said. "The net result is a rise in the demand
for OPEC oil."
(Reporting by Alex Lawler; additional reporting by Henning Gloystein;
editing by Louise Heavens and David Clarke)
[© 2017 Thomson Reuters. All rights
reserved.] Copyright 2017 Reuters. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed. |