Futures fell as much as 1 percent in New York, paring last week’s 1.8 percent advance. U.S. explorers added 11 rigs last week, capping the longest stretch of gains since 2011, according to Baker Hughes Inc. data. Prices fell even after Saudi Arabian Oil Co. Chief Executive Officer Amin Nasser said the global oil market is moving closer to balance despite the U.S. shale boom.
The recovery in U.S. drilling activity is damping optimism that had sent prices above $53 a barrel after some members of the Organization of Petroleum Exporting Countries voiced support for prolonging production cuts with other nations beyond June. While U.S. crude stockpiles declined from a record, OPEC said in a report Wednesday that rivals in the American shale industry are growing stronger.
“U.S. drillers are recovering output faster than the market predicted and it’s getting faster every day,” Will Yun, a commodities analyst Hyundai Futures Corp., said by phone in Seoul. This “makes it hard to predict how much it’s capable of expanding production.”
West Texas Intermediate for May delivery fell as much as 55 cents to $52.63 a barrel on the New York Mercantile Exchange, before trading at $52.75 a barrel at 12:43 p.m. in Singapore. Futures gained 94 cents last week to close at $53.18 a barrel. Total volume traded was about 14 percent below the 100-day average.
Brent for June settlement dropped 45 cents, or 0.8 percent, to $55.44 a barrel on the London-based ICE Futures Europe exchange. The global benchmark crude traded at a $2.29 premium to June WTI. No futures were traded in New York or London on Friday due to the Good Friday holiday.
See Gadfly commentary: OPEC warns of a world that still has far too much oil
The U.S. drill rig count climbed to 683 last week, the highest since April 2015 and a 13th week of gains, Baker Hughes data showed on Friday. The number of working rigs has more than doubled from a 2016 low of 316 in May. Explorers in the Lone Star State led the week’s growth, with eight more rigs put to work in the Permian Basin of west Texas and New Mexico while three started up in the Eagle Ford of south Texas.
- Hedge funds boosted bets on higher WTI crude prices a second week as futures topped $53 a barrel for the first time in a month, U.S. Commodity Futures Trading Commission data show.
- Nigeria will revive oil production this summer as it completes maintenance and repairs, and expects fellow OPEC members to continue to cut their output in the second half of the year, Oil Minister Emmanuel Kachikwu said.