Oil halted its advance below $54 a barrel as an increase in US drilling countered signs Opec members including Saudi Arabia are sticking to planned output cuts to stabilize the market.
Futures slid as much as 0.6 percent in New York after rising 3.2 percent the previous three sessions. US drillers added rigs for the 10th straight week to the highest level in a year, according Baker Hughes Inc. Saudi Arabia is among Opec producers leading a reduction in supply, the group’s Secretary-General Mohammad Barkindo said in an interview with Kuwait’s official news agency.
Oil last year capped its biggest annual gain since 2009 as the Organization of Petroleum Exporting Countries and 11 other nations agreed to curb output starting Jan. 1 in an effort to trim a global inventory glut. While producers from Iraq to Kuwait say they have started to curb supply, an increase from countries such as Libya”•exempt from cuts”•could put pressure on prices.
“The oil market has found a temporary equilibrium point and appears content to sit around that level at the moment,” said Ric Spooner, chief market analyst at CMC Markets in Sydney. “We are getting anecdotal evidence of Opec production cuts and that’s enough to hold the market firm.”
West Texas Intermediate for February delivery slid as much as 33 cents to $53.66 a barrel on the New York Mercantile Exchange and was at $53.72 at 2:38 p.m. in Singapore. Total volume traded was about 60 percent below the 100-day average. The contract rose 23 cents to $53.99 a barrel on Friday to cap a fourth weekly gain.
Rig Count
Brent for March settlement lost as much as 29 cents, or 0.5 percent, to $56.81 a barrel on the London-based ICE Futures Europe exchange. The global benchmark crude traded at a premium of $2.26 to March WTI.
US drillers boosted the rig count by 4 to 529 last week, according to data Friday from Baker Hughes. It’s the highest level since the week ended Jan. 1, 2016. Companies have added more than 100 rigs since the end of September.