Oil extended its decline below $50 a barrel as U.S. drillers continued to boost activity, countering OPEC’s efforts to drain a global glut.
Futures in New York headed for a sixth day of losses, dropping as much as 1.2 percent after falling 9.1 percent last week. Rigs targeting crude in the U.S. rose to the most since September 2015, according to Baker Hughes Inc. In Libya, crude production dropped 11 percent as clashes among rival armed groups led to the closure of some of the OPEC nation’s biggest oil export terminals.
Oil last week broke below the $50 a barrel level it had held above since the Organization of Petroleum Exporting Countries and 11 other nations started trimming supply on Jan. 1. U.S. crude stockpiles have climbed to a record and production surged to the highest in more than a year, while Saudi Arabia’s Oil Minister Khalid Al-Falih said global supplies are falling slower than expected.
“Supply appears to be outpacing demand, putting the focus back on the glut,” said Jonathan Barratt, chief investment officer at Ayers Alliance Securities in Sydney. “OPEC is unlikely to react until prices get down to about $40 a barrel.”
West Texas Intermediate for April delivery lost as much as 59 cents to $47.90 a barrel on the New York Mercantile Exchange and traded at $48.26 at 2:47 p.m. in Hong Kong. Total volume traded was about 44 percent above the 100-day average. The contract dropped 79 cents to $48.49 on Friday, capping the biggest weekly decline since November.
Rig Count
Brent for May settlement fell as much as 52 cents, or 1 percent, to $50.85 a barrel on the London-based ICE Futures Europe exchange. Prices slid 8.1 percent last week. The benchmark traded at a $2.42 premium to May WTI.
See also: Oil bulls head for exit before market dive on swollen stockpiles
U.S. drillers boosted the rig count by 8 to 617 last week, according to data Friday from Baker Hughes. Companies have added 92 machines to fields this year. The nation’s crude output has climbed to 9.09 million barrels a day, according to data from the Energy Information Administration.
Oil-market news:
Libyan output has dropped by about 80,000 barrels a day to 620,000 barrels since fighting broke out among armed groups on March 3, according to a person familiar with the matter, who asked not to be identified because they aren’t authorized to speak to the media. Iraq is in talks with U.S. companies including Exxon Mobil Corp. to develop crude infrastructure projects in the country, according to a statement posted on the oil ministry website citing minister Jabbar Al-Luaibi.
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