Published: Tue, March 13, 2018
Finance | By Claude Patterson

Oil prices fall as relief over falling United States rig count fades

Oil prices fall as relief over falling United States rig count fades

Brent crude futures LCOc1 were at $65.58 per barrel, up 9 cents, or 0.1 percent, from their previous close.

Brent crude oil could slide below $60/bbl as a surge in US shipments to Asia threatens to undermine the production cut deal between OPEC and its allies, according to ING analysts, in contrast to bullish views from Goldman Sachs and others who see prices supported as strong demand soaks up supply from the U.S.

The reduction came as gross short positions on the New York Mercantile Exchange climbed to their highest level in almost a month.

U.S. West Texas Intermediate (WTI) crude futures CLc1 fell 68 cents, or 1.1 percent, to settle at $61.36 per barrel.

In oil markets, US energy companies last week cut oil rigs for the first time in nearly two months RIG-OL-USA-BHI, with drillers cutting back four rigs, to 796, Baker Hughes (GE.N) energy services firm said on Friday.

That's more than top exporter Saudi Arabia producers and almost as much as Russian Federation pumps out, at nearly 11 million bpd.

"We are maintaining a bearish trading stance in anticipation of a range in nearby WTI between about $58 and $63, Jim Ritterbusch, president of Ritterbusch and Associates, said in a note".

Investors are said to be weighing rising USA output (which continues to climb even though rig counts were cut slightly last week) and supply against the possibility that the Organization of the Petroleum Exporting Countries (OPEC) and non-OPEC producers will maintain its supply cuts this year and possibly even next.

"Permian and Bakken shale basins still saw active oil rigs rising by 2 and 3 last week, respectively, and are likely to keep US oil production on (an) increasing trend", ING said.

Also on Sunday, Saudi officials said they would be delaying the initial public offering of Saudi Aramco until 2019.

The US consumer price index comes out Tuesday. A stronger dollar would likely dent oil prices.

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