Oil extends decline as rising U.S. output weighs

Features Reuters

(Copyright Reuters 2017)

Oil prices extended declines on Monday, dragged down by signs of growing output in the United States that would partly offset production cuts by OPEC and other producers.

Continue Reading Below

London Brent crude for March delivery was down 26 cents at $55.26 a barrel by 0005 GMT after settling down 72 cents on Friday.

NYMEX crude for March delivery was down 22 cents at $52.95 a barrel.

The U.S. weekly oil and gas rig count from Baker Hughes showed that U.S. drillers added 15 oil rigs in the week, the 12th gain in 13 weeks. That brought the total count to 566, the most since November 2015. [RIG/U]

The Organization of the Petroleum Exporting Countries and other producers, including Russia, agreed to cut output by almost 1.8 million barrels per day (bpd) in the first half of 2017 to relieve a two-year supply overhang.

But U.S. oil production has been rising, with the International Energy Agency forecasting total U.S. output growth of 320,000 bpd in 2017 to an average of 12.8 million bpd.

Continue Reading Below

"The rise in U.S. output should not be unexpected," ANZ bank said in a note.

"However we expect the reductions being made by OPEC will far exceed any rise in the U.S. and quickly reduce the global inventory that has been built up over the past two years," it added.

Hedge funds and money managers boosted bullish wagers on U.S. crude oil to the highest level since mid-2014, Commodity Futures Trading Commission (CFTC) data showed on Friday, as agreed output cuts by the world's top producers began to eat into a global glut.

President Donald Trump on Sunday defended his move to ban entry of refugees and people from seven Muslim-majority nations and said the United States would resume issuing visas for all countries in the next 90 days as he faced rising criticism at home and abroad and new protests in U.S. cities.

(Reporting by Osamu Tsukimori; Editing by Richard Pullin)