Oil recovers after losses
LONDON, February 12, 2018 – Crude oil prices continued to climb on Monday, as the market continued to recover from the previous week’s steep losses and investors turned their attention to the upcoming U.S. supply data.
The U.S. West Texas Intermediate crude March contract was up 81 cents or about 1.37% at $60.01 a barrel by 04:00 a.m. ET (08:00 GMT), off Friday’s one-and-a-half month low of $59.20.
Elsewhere, Brent oil for April delivery on the ICE Futures Exchange in London advanced 67 cents or about 1.05% to $63.45 a barrel, after falling to a two-month trough of $61.77 on Friday.
Oil prices signed their worst weekly loss in two years on Friday after General Electric (NYSE:GE)’s Baker Hughes energy services firm reported that the number of oil drilling rigs jumped by 26 to 791 last week.
That marked a third straight week of increases and the largest weekly rise in more than a year, implying that further gains in domestic production are ahead.
The report came after data on Wednesday showed U.S. oil production, driven by shale extraction, rose to an all-time high of 10.25 million barrels per day (bpd). That figure is above that of top exporter Saudi Arabia and within reach of Russia’s output levels.
That added to fears that rising U.S. output would dampen OPEC’s efforts to rid the market of excess supplies.
The producer group, along with some non-OPEC members led by Russia, agreed in December to extend oil output cuts until the end of 2018.
The deal to cut oil output by 1.8 million barrels a day (bpd) was adopted last winter by OPEC, Russia and nine other global producers. The agreement was due to end in March 2018, having already been extended once.
This week, market participants are awaiting weekly information on U.S. stockpiles of crude and refined products on Tuesday and Wednesday.
Traders will also focus on monthly reports from the Organization of Petroleum Exporting Counties and the International Energy Agency to assess global oil supply and demand levels.
Elsewhere, gasoline futures gained 0.37% to $1.708 a gallon, while natural gas futures dropped 0.85% to $2.562 per million British thermal units.