Crude Oil Prices Settle Lower as U.S. Rig Counts Continue Climb

Investing.com – WTI crude oil prices settled lower on Friday as data showing U.S. oil rig counts continued to climb exacerbated fears of a ramp up in U.S. output.

On the New York Mercantile Exchange for July delivery fell 21 cents to settle at $65.74 a barrel, while on London’s Intercontinental Exchange, fell 1.18% to trade at $76.41 a barrel.

The number of oil rigs operating in the US increased by 1 to 862, its highest level since March 13, 2015, according to data from energy services firm Baker Hughes, pointing to signs of an expansion in U.S. output.

The continued uptick in drilling activity comes as the Energy Information Administration said Wednesday U.S. oil output rose to a record 10.8 million barrels.

Fears that surging U.S. output may halt the pace of rebalancing in oil markets forced JPMorgan to cut outlook on oil prices.

JPMorgan cut its 2018 crude forecast for WTI by $3 to $62.20 a barrel, Reuters reported, citing traders.

Trading in oil was choppy for most of the week amid upbeat comments from OPEC members as they attempted to allay fears that the oil cartel would lift limits on production curbs at its June 22 meeting.

Algeria’s oil minister said Thursday OPEC would focus on balancing the market rather than on easing production curbs, Reuters reported. While Iraqi’s Oil Minister, said a production increase in the second half of the year was not on the agenda for the OPEC meeting.

OPEC and other producers, including Russia have cut output by 1.8 million barrels per day since 2017 to rid the market of excess supplies. The OPEC-led deal, agreed in November 2016, was renewed last year through 2018.

Oil prices were also supported in the week by a report pointing to signs of ongoing Venezuela output woes as the country is nearly a month behind delivering crude to customers from its main export terminals, Reuters said, citing shipping data.

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