Oil traded near $53 a barrel after drilling in the U.S. climbed to the highest in more than a year, countering OPEC’s efforts to clear a supply glut.
Futures were little changed in New York after falling 1.1 percent on Friday. Rigs targeting crude in the U.S. rose last week to the most since November 2015, according to Baker Hughes Inc., while American crude output is at the highest since April, government data shows. Oil supplies from OPEC are sliding this month, according to tanker-tracker Petro-Logistics SA.
Oil has fluctuated above $50 a barrel since 11 nations including Russia last month joined with the Organization of Petroleum Exporting Countries to trim supply. While Saudi Arabia says more than 80 percent of the targeted cuts have been implemented since the deal took effect on Jan. 1, the International Energy Agency predicted a gain in U.S. shale output as prices rise.
“Yet another good shale oil week,” said Bjarne Schieldrop, chief commodities analyst at SEB AB in Oslo. “OPEC’s decision to cut production has lifted prices,” and this “will accelerate the revival of U.S. shale oil production.”
West Texas Intermediate for March delivery fell as much as 33 cents to $52.84 a barrel on the New York Mercantile Exchange and was at $53.16 at 1:06 p.m. in London. Total volume traded was about 17 percent below the 100-day average. The contract slid 61 cents to $53.17 on Friday.
Brent for March settlement, which expires Tuesday, dropped 11 cents to $55.41 a barrel on the London-based ICE Futures Europe exchange. The global benchmark crude traded at a premium of $2.22 to WTI. The more-active April contract lost as much as 47 cents to $55.23.
The U.S. drill rig count climbed by 15 to 566 last week, according to data from Baker Hughes on Friday. Explorers have added machines for eight months, the longest run since September 2014. American crude production is at 8.96 million barrels a day, according to the Energy Information Administration.
OPEC will cut supply by 900,000 barrels a day in January, the first month of the accord’s implementation, said Geneva-based Petro-Logistics.
The group’s compliance with agreed output reductions appeared to persuade speculators, who boosted their net-long position in WTI by 6.1 percent in the week to Jan. 24, according to the U.S. Commodity Futures Trading Commission.
A tanker left Libya’s Brega port with about 630,000 barrels of oil, the head of Sirte Oil’s media office said.