Oil extended the longest run of gains this year as US drilling slowed after a record expansion.
Futures climbed as much as 0.7 percent in New York after rising 8.3 percent the previous seven sessions. US drillers targeting crude reduced the number of active rigs for the first time in 24 weeks, according to Baker Hughes Inc. data on Friday. Hedge fund wagers on lower prices in the week through June 27 increased at a slower pace than the two previous weeks, according to data from the Commodity Futures Trading Commission.
While prices have surged the past week, oil in New York and London still posted a monthly loss in June after tumbling into a bear market on concerns that rising global supply will counter cuts from the Organization of Petroleum Exporting Countries and its partners. Libyan production has climbed to more than 1 million barrels a day for the first time in four years.
“Given the recent upward momentum, it wouldn’t be surprising to see oil fairly close to some sort of downward correction,” said Ric Spooner, a market analyst at CMC Markets in Sydney. “Libya is probably close to its peak production. Nevertheless, the fact its output reached these levels faster than some had anticipated is a negative for the overall supply situation.”
West Texas Intermediate for August delivery rose as much as 34 cents to $46.38 a barrel on the New York Mercantile Exchange, and was at $46.28 at 7:56 a.m. in London. Total volume traded was about 20 percent below the 100-day average. The contract gained $1.11 to $46.04 on Friday to post a 7 percent increase for the week.
Brent for September settlement was 20 cents higher at $48.97 a barrel on the London-based ICE Futures Europe exchange. Front-month prices gained 5.2 percent last week. The global benchmark crude traded at a premium of $2.45 to September WTI.
US drillers reduced the number of rigs by 2 to 756, snapping the longest stretch of gains in at least three decades, according to Baker Hughes. The count had climbed to the highest level since April 2015.
Money managers’ WTI net-long positions, the difference between wagers on a price increase and bets on a decline, was little changed at 133,606 futures and options, according to the CFTC report released Friday.