Oil held gains near the highest close in a week as US drillers reduced the number of active rigs by the most since January.
Futures were little changed in New York after rising 3.7 percent the previous two sessions. Drillers targeting crude trimmed the rig count by 5 to 763, the second decline this month, according to data Friday from Baker Hughes Inc. Royal Dutch Shell Plc, the world’s largest oil trader, is said to have loaded its first crude from Libya in five years over the weekend.
Oil in New York has fluctuated below $50 a barrel as investors weigh rising global output against supply cuts by the Organization of Petroleum Exporting Countries and its allies that is draining a glut slower than expected. While the US rig count showed declines recently, American output has continued to expand, climbing to the highest level since July 2015.
“Despite the fact that production has increased, it remains the case that inventories are falling,” said Ric Spooner, an analyst at CMC Markets in Sydney. “It does indicate that the OPEC cuts are working. Prices remain in a range of about $44 to $52 at the moment.”
West Texas Intermediate for September delivery, which expires Tuesday, was 5 cents lower at $48.46 a barrel on the New York Mercantile Exchange at 7:57 a.m. in London. Total volume traded was about 2 percent above the 100-day average. Prices advanced $1.42, or 3 percent, to $48.51 on Friday, trimming the weekly loss to 0.6 percent.
Brent for October settlement lost 8 cents to $52.64 a barrel on the London-based ICE Futures Europe exchange. Prices rose 1.2 percent last week. The global benchmark crude traded at a premium of $4.05 to October WTI.
The number of active rigs in fields is still near the highest since April 2015, according to Baker Hughes data. The expansion in American drilling is slowing as output from major shale plays is set to climb to a record next month.
The Shell cargo loaded on Saturday is for 600,000 barrels of crude from Libya’s Zueitina port, according to two people familiar with the matter. Iraqi state oil marketing company, known as SOMO, is considering changing the current pricing formula for oil sales to Asian customers, according to traders who asked not to be identified.
Recommended for you
Read the latest opinion pieces from our Energy Voice columnists
- Opinion: Changed days for operators and the supply chain?
- Does the UK’s subsea industry actually belong to the UK?
- Opinion: Ruling finally gives clarity over evidence for North Sea prohibition appeals
- Opinion: Scrap the shady underbelly of offshore industry
- Can The Shale Boom Avoid These Bottlenecks?