Oil steadied below $49 a barrel as U.S. drillers continued to boost activity, countering OPEC’s efforts to drain a global glut.
Futures were little changed in New York after falling 9.1 percent last week, the biggest weekly loss since November. 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. Rising U.S. output is the “ main threat” to the global output deal, according to Russia’s largest producer.
“Few would bet against a further selling spree,” said Stephen Brennock, an analyst at PVM Oil Associates Ltd. in London. The market has been “vulnerable to a downward spiral” as speculators remain heavily invested despite “a lack of bullish catalysts.”
West Texas Intermediate for April delivery lost 19 cents to $48.30 a barrel on the New York Mercantile Exchange at 12:12 p.m. in London. Total volume traded was about 18 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 11 cents to $51.26 a barrel on the London-based ICE Futures Europe exchange. Prices slid 8.1 percent last week. The benchmark traded at a $2.41 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 eight 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. While OPEC’s deal with non-members to curb output “shows its sustainability” and would be useful for the global economy, there are risks the agreement won’t be extended because U.S. producers are reacting so rapidly to higher prices, Rosneft PJSC’s press service said by email. John Wood Group Plc agreed to acquire Amec Foster Wheeler Plc in an all-share deal that values the U.K. engineering-service provider at about 2.23 billion pounds ($2.7 billion). The shares of both companies surged.
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