Crude Oil gains In Asia On US Rig Count Numbers, Strong Demand Tone

Investing.com – Crude oil gained in Asia on Monday, getting some support as the number of rigs drilling for oil dipped last week and on continued strong demand cues from the regional market.

US West Texas Intermediate (WTI) crude futures for January delivery edged up 0.07% to $57.37 a barrel. ICE Brent rose 0.06% to $63.27 a barrel.

Last week, oil settled on a mixed note on Friday, with prices notching their third-consecutive weekly loss amid concerns over rising production in the U.S.

Meanwhile, February futures, the benchmark for oil prices outside the U.S., dipped 8 cents, or roughly 0.1%, to settle at $63.23 a barrel by close of trade. For the week, Brent suffered a loss of about 0.3%.

Both WTI and Brent logged a third-straight week of declines amid concerns that rising U.S. output would dampen OPEC’s efforts to rid the market of excess supplies.

oil production rose by 73,000 barrels per day (bpd) last week, according to government data. Domestic U.S. output has rebounded by almost 16% since the most recent low in mid-2016 to a total of 9.78 million bpd, bringing output close to levels of top producers Russia and Saudi Arabia.

The number of oil drilling rigs fell by four to 747 in the week to Dec. 15, data from General Electric (NYSE:NYSE:)’s Baker Hughes energy services unit showed, the first cut to drilling numbers in six weeks. However, the rig count, an early indicator of future output, is still much higher than a year ago when only 510 rigs were active.

The steady increase in U.S. production has taken some of the edge off an OPEC-led initiative to support the market by cutting production.

The Organization of Petroleum Exporting Countries (OPEC), along with some non-OPEC producers led by Russia, agreed last month to extend current oil output cuts for a further nine months until the end of 2018. The deal to cut oil output by 1.8 million barrels a day (bpd) was adopted last winter by OPEC, Russia and nine other global producers. The agreement was due to end in March 2018, having already been extended once.

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