Crude Oil Prices Snap 2-Week Winning Streak as Oil Rigs Near 3-Year Highs

Investing.com – Crude oil prices snapped a two-week winning streak despite settling higher on Friday, as fears over rising U.S. oil output persisted after data showed the number of oil rigs rose to their highest in nearly three years.

On the New York Mercantile Exchange for April delivery rose 26 cents to settle at $63.25 a barrel, while on London’s Intercontinental Exchange, gained 45 cents to trade at $64.28 a barrel.

The number of oil rigs operating in the US rose by one to 800, the highest level since April 2, 2015, according to data from energy services firm Baker Hughes.

That added to concerns that U.S. crude production may curtail major oil producers’ efforts to drain excess supply in the industry, as oil rig data often serves as an indicator of future production and demand.

Much of rebound in oil prices seen Friday was said to be on dollar weakness, while the underlying sentiment on oil prices remained bearish as Energy Information Administration (EIA) data Wednesday showed U.S. stockpiles of crude continued to build for the second-straight week.

Inventories of U.S. crude rose by 3.019 million barrels for the week ended Feb. 23, exceeding expectations of 2.4 million barrels. Gasoline inventories – one of the products that crude is refined into – by 2.483 million barrels, confounding expectations for a decline of 190,000 barrels.

Also adding to negative sentiment was an ongoing uptick in U.S. crude production to 10.3 million barrels per day. That strengthened the U.S.’s position as the world’s second largest oil producer, as it closes in on leader Russia, fuelling investor fears that rebalancing in oil markets could face headwinds.

Money managers have turned bearish on oil prices, reducing their WTI net-long position – the difference between bets on a price increase and wagers on a drop – for a ended Feb. 23, according to U.S. Commodity Futures Trading Commission data.

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