Oil held its biggest monthly decline in a year as U.S. producers increased drilling for a fifth week amid a glut of crude and fuel supplies that are at the highest seasonal level in at least two decades.
Futures were up 0.3 percent in New York after dropping 14 percent in July. Prices earlier fell as much as 0.9 percent. Drillers boosted the number of rigs by 3 for the longest run of gains since last August, according to data Friday from Baker Hughes Inc. Libya has reopened four oil ports and resumed export activities, according to a statement from the Petroleum Facilities Guard.
Oil has slipped about 19 percent from its recent peak in early June, ending a recovery that saw prices almost double from a 12-year low in February. Producers including BP Plc, Royal Dutch Shell Plc and Total SA reported sharp declines in second-quarter earnings as lower energy prices take a toll.
“There is a clear downward momentum to the market at the moment,” said Michael McCarthy, a chief strategist at CMC Markets in Sydney. “There are concerns about the oversupply situation continuing. Clearly $40 a barrel is a key point for West Texas and I’d expect to see support there given the bounces we’ve seen previously at that level.”
West Texas Intermediate for September delivery was at $41.74 a barrel on the New York Mercantile Exchange, up 14 cents, at 1:27 p.m. Hong Kong time. The contract rose 46 cents to $41.60 on Friday as a weakening dollar bolstered investor appetite for commodities, snapping an 8.5 percent decline over six sessions. Total volume traded was about 17 percent below the 100-day average. Prices fell 5.9 percent last week.
Brent for October settlement was 18 cents higher at $43.71 a barrel on the London-based ICE Futures Europe exchange. The September contract expired Friday after falling 24 cents to $42.46, capping a nearly 15 percent drop for the month. The global benchmark traded at a premium of $1.23 to WTI for October.
For a story on slowing seasonal demand in the U.S., click here.
The U.S. drill rig count climbed to 374, the highest level since March, Baker Hughes said Friday. The nation’s crude inventories rose to 521.1 million barrels through July 22, keeping supplies more than 100 million barrels above the five-year average, according to the Energy Information Administration.
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