Futures rose 0.5 percent in New York after trading in the narrowest range since January 2004. U.S. drillers boosted the rig count to the highest since October 2015, Baker Hughes Inc. said Friday. Meanwhile, hedge funds raised net-long positions on West Texas Intermediate and Brent to a record.
Oil has traded above $50 a barrel since the Organization of Petroleum Exporting Countries and 11 other nations started trimming supply on Jan. 1 to ease a global glut. While Goldman Sachs Group Inc. predicts the market will shift into deficit in the first half of this year, U.S. crude stockpiles have increased the past six weeks to the highest level in more than three decades.
“Prices continue to be pulled between the contradictory influences of reports of falling OPEC production and rising U.S. crude inventories,” said David Martin, an analyst at JPMorgan Chase & Co. in London.
WTI for March delivery, which expires Tuesday, was up 29 cents at $53.69 a barrel on the New York Mercantile Exchange at 1 p.m. local time on Monday. The day’s transactions will be booked on Tuesday for settlement purposes because of the U.S. Presidents’ Day holiday. Total volume traded was about 75 percent below the 100-day average. The more-active April contract rose 21 cents to $53.99.
Brent for April delivery gained 37 cents to $56.18 a barrel on the London-based ICE Futures Europe exchange. Prices rose 16 cents to $55.81 on Friday. The global benchmark traded at a premium of $2.19 to April WTI.
Rigs targeting crude in the U.S. increased by six to 597, according to data from Baker Hughes. Drillers have added 72 rigs this year. American oil production is near the highest level since April, according to government data.
- For the first time ever, hedge funds hold more than a billion barrels of bets that crude oil prices will rally. Money managers last week extended their faith in OPEC-led supply cuts, increasing outright long positions in the global benchmark Brent and its U.S. counterpart West Texas Intermediate to a fresh record.
- China National Petroleum Corp. bought a stake in Abu Dhabi’s largest oil concession as the Middle Eastern emirate with 6 percent of global crude reserves looks to Asia for investment to raise output capacity.
- Russia overtook Saudi Arabia as the world’s largest crude producer in December, when both countries started restricting supplies ahead of agreed cuts with other global producers to curb the worst glut in decades.