Oil prices rebound after USA drilling pullback

Oil prices rebound after USA drilling pullback

"There is still some support in the market from the situation in Iran", John Kilduff, a partner at Again Capital LLC, a New York-based hedge fund, said by telephone. Output curbs by the Organization of Petroleum Exporting Countries and allied suppliers have buoyed prices, with producers promising to continue the curbs for all of 2018.

"A drop in active oil rigs is usually bullish for oil prices", said Michael Poulsen, an analyst at Global Risk Management Ltd.

President Nicolas Maduro on Friday said Venezuela in the coming days will issue 100 million units of an oil-backed cryptocurrency known as the petro, which will be worth the price of one barrel in Venezuela's oil basket. Yet at current prices levels, "a significant portion of shale production is viable and profitable".

U.S. West Texas Intermediate (WTI) crude futures ended Friday's session down 57 cents, or almost 1%, at $61.44 a barrel, falling from the $62.21 high reached the previous day, and last seen in May 2015.

Brent crude futures were at $67.78 a barrel, 16 cents above their last close.

Traders said the gains were due to a slight decline in the number of USA rigs drilling for new production, which eased by five in the week to January 5, to 742, according to data from oil services firm Baker Hughes. The price differential (spread) between WTI and Brent crude narrowed by almost a dime to $6.10 a barrel week over week. Over the past week, protests erupted in a number of Iranian cities against the government's economic policies.

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In the US, drillers are seeking to do more with less in a bid to boost profits.

Crude inventories at the key pipeline hub in Cushing, Oklahoma, decreased by 1.5 million barrels in the week ended January 5, according to a forecast compiled by Bloomberg.

OPEC's crude output edged up by a net 50,000 barrels a day in December, led by Iraq and Nigeria, which each lifted production by 60,000 barrels.

Oil prices have received general support from production cuts led by OPEC and a group of non-OPEC producers led by Russian Federation, which started last January, and are set to last through 2018, as well as from strong economic growth and financial markets.

With assistance from Heesu Lee and Grant Smith.

Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. Off-topic, inappropriate or insulting comments will be removed.

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