Oil halted its advance below $54 a barrel as an increase in US drilling countered signs Opec members, including Saudi Arabia, are sticking to planned output cuts to stabilise the market.
Futures slid as much as 0.6 per cent in New York after rising 3.2 per cent the previous three sessions. US drillers added rigs for the 10th straight week to the highest level in a year, according Baker Hughes.
Saudi Arabia is among Opec producers leading a reduction in supply, the group’s secretary-general Mohammad Barkindo said in an interview with Kuwait’s official news agency.
Oil last year capped its biggest annual gain since 2009 as the Organisation of Petroleum Exporting Countries (Opec) and 11 other nations agreed to curb output starting January 1st 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 – exempt from cuts – could put pressure on prices.
Equilibrium point
“The oil market has found a temporary equilibrium point and appears content to sit around that level at the moment,” said Ric Spooner, chief market analyst at CMC Markets in Sydney. “We are getting anecdotal evidence of Opec production cuts and that’s enough to hold the market firm.”
West Texas Intermediate (WTI) for February delivery slid as much as 33 cent to $53.66 a barrel on the New York Mercantile Exchange. Total volume traded was about 60 per cent below the 100-day average. The contract rose 23 cent to $53.99 a barrel on Friday to cap a fourth weekly gain. Rig Count Brent for March settlement lost as much as 29 cent, or 0.5 per cent, to $56.81 a barrel on the London-based ICE Futures Europe exchange. The global benchmark crude traded at a premium of $2.26 to March WTI. – (Bloomberg)
