Oil prices slide after U.S. drillers add rigs
U.S. energy companies added nine oil drilling rigs in the week to Nov. 10, the second increase in three weeks, bringing the total count up to 738, General Electric Co’s Baker Hughes energy services firm said in its closely followed report, APA reports quoting Reuters.
Brent futures fell 38 cents, or 0.6 percent, at $63.55 a barrel by 1:12 p.m. EST (1813 GMT), while U.S. West Texas Intermediate crude was down 45 cents at $56.72 per barrel.
Earlier in the week, Brent rose to $64.65, its highest since June 2015, and WTI rose to $57.92, its highest since July 2015.
Both contracts were on track to rise about 2 percent this week, which would put them both up for a fifth week in a row.
Traders said higher prices in recent weeks were the result of efforts led by the Organization of the Petroleum Exporting Countries (OPEC) and Russia to tighten the market by cutting output, as well as strong demand and rising political tensions.
There are also expectations in the market that OPEC’s next meeting on Nov. 30 will agree to extend cuts beyond the current expiry date in March 2018.
“Market participants expect OPEC to extend the production cuts beyond March 2018 and stocks to decline further,” analysts at Commerzbank said, noting, however, that “the higher price level should lead to a further rise in U.S. shale oil production.”
U.S. production was forecast to rise to 9.2 million barrels per day (bpd) in 2017 and a record 10.0 million bpd in 2018 from 8.9 million bpd in 2016, according to federal energy projections this week. Output peaked at 9.6 million bpd in 1970. [EIA/M]
Goldman Sachs also warned of greater price volatility ahead, citing rising tensions in the Middle East, especially between OPEC members Saudi Arabia and Iran, along with soaring U.S. oil production.
Hezbollah’s leader said Saudi Arabia had declared war on Lebanon and his Iran-backed group, accusing Riyadh of detaining Saad al-Hariri and forcing him to resign as Lebanon’s prime minister to destabilise the country.
“The political situation in Saudi Arabia remains sufficiently volatile to spike crude values by at least 50 cents at any given time as was the case (Thursday),” Jim Ritterbusch, president of Chicago-based energy advisory firm Ritterbusch & Associates, said in a report, noting he did not expect Friday’s oil rig count to exert much price impact.
Another factor supporting prices was strong demand in southeast Asia, where the number of tankers holding oil in storage around Singapore and Malaysia has halved since June.
Related news releases
- 18.11.20179 injured in large fire atop 6-story apartment building in New York
- 18.11.2017Argentine submarine goes missing for two days, major search op underway
- 18.11.2017Canada, Mexico try more flexibility as key NAFTA round opens
- 17.11.2017US official: If Turkey buys Russian systems, they can’t plug into NATO tech
- 17.11.2017Turkish businessman Reza Zarrab escapes knife attack in U.S. prison
- 17.11.2017Canadian senator dies on parliamentary trip in Colombia
- 17.11.2017South Dakota Keystone pipeline shut down after oil spill
- 17.11.2017UN Security Council rejects Russian draft on Syria chemical probe
- 17.11.2017The impeachment of President Donald Trump has officially begun
- 17.11.2017Fed's Williams calls for global rethink of monetary policy
- 17.11.2017US House passes tax reform bill, sends measure to Senate
- 16.11.2017Trump urges U.N. council to renew Syria chemical arms inquiry
- 16.11.2017More worries in Congress over cuts at U.S. State Department
- 16.11.2017US Democrats enter new articles to impeach Trump
- 15.11.2017Planned talks between Venezuelan opposition, government will not take place
- 15.11.2017U.S. security officials arrive in Israel to discuss Syria agreement
- 15.11.2017US FDA approves first 'digital pill'
- 15.11.2017Death toll as a result of a gunman in California fired at school reached - UPDATED
- 15.11.2017De Mistura: Putin, Trump create qualitatively new situation in Syrian settlement
- 14.11.2017At least 3 dead in California school shooting, shooter killed by police
- 14.11.2017Trump vows free and open Indo-Pacific region
- 14.11.2017US Army lifts ban on recruits with mental health history
- 12.11.2017Six people killed in bus-hearse crash in Mexico
- 12.11.2017Geneva talks should be the only platform for Syrian settlement - State Department
- 09.11.2017US imposes sanctions on Venezuela: Senior gov't officials on the list
- 09.11.2017Turkish premier, US vice president meet at White House
- 09.11.2017US lawmakers renew gun control bid after Texas shooting
- 09.11.2017U.N. warns if no Yemen aid access, world will see largest famine in decades
- 09.11.2017Trump to talk trade and North Korea with Chinese leader Xi
- 09.11.2017US tightens restrictions on travel to Cuba
- 08.11.2017US blames Iran for missile attack on Saudi airport
- 08.11.2017Twitter rolls out 280-character tweets to most users
- 08.11.2017Texas shooting: Gunman 'escaped mental hospital in 2012'
- 08.11.2017US Navy’s next-gen ballistic missile submarines just got cheaper
- 07.11.2017House Republicans seek U.S. tax vote next week; Fitch warns on deficit
- 07.11.2017Senate banking panel backs new North Korea sanctions
- 07.11.2017Trump requests over $5bln extra defense spending for North Korea, Afghanistan
- 05.11.2017US senator Rand Paul assaulted at home in Kentucky
- 04.11.2017U.S. warns of threat to diplomatic staff in Somali capital
- 04.11.2017Twitter responds after Trump’s account deactivated
- 11.11.2017APEC ministers publish joint statement after wrangling over language
- 12.11.2017Venezuela sets high-profile location for Monday debt talks
- 12.11.2017Mass graves discovered near Hawija in Iraq
- 10.11.2017Colombia 'committed' to deal with FARC
- 10.11.2017Turkish premier urges US to extradite FETO leader
- 10.11.2017State Dept. denies report top envoys being depleted