(FE)
Oil prices fell on Monday as rising US drilling activity and steady supplies from OPEC countries despite touted production cuts pressured already-bloated markets. Prices for front-month Brent crude futures, the international benchmark for oil, were 20 cents below their last settlement at 0025 GMT, at $51.56 per barrel. US West Texas Intermediate (WTI) crude futures were down 28 cents at $48.50 a barrel. Traders said that prices were under pressure due to rising U.S. drilling activity and ongoing high supplies by the Organization of the Petroleum Exporting Countries (OPEC) despite its pledge to cut output by almost 1.8 million barrels per day (bpd) together with some other producers like Russia.
“Crude oil has attempted to break out of the trading range that formed last year … However, this uptrend has stalled,” futures brokerage CMC Markets said in a note on Monday. “Now there is good, strong momentum to the downside.”
US drillers added 14 oil rigs in the week to March 17, bringing the total count up to 631, the most since September 2015, energy services firm Baker Hughes Inc said on Friday, extending a recovery that is expected to boost shale production by the most in six-months in April. As a result, US oil output has risen to over 9.1 million bpd from below 8.5 million bpd in June last year.
Reacting to the ongoing glut in markets, financial oil traders cut their net long US crude futures and options positions in the week to March 14, the third consecutive cut, the U.S. Commodity Futures Trading Commission (CFTC) said on Friday.
