Crude oil falls for 2nd day as U.S. oil rig count rises

By Naveen Thukral
SINGAPORE, March 21 (Reuters) - Crude oil slid for a second
session on Monday, falling further from last week's 2016 highs
on concerns over a supply glut after the U.S rig count rose for
the first time since December.
U.S. energy firms last week added one oil rig after 12 weeks
of cuts, according to data by industry firm Baker Hughes. The
addition, coming after oil rigs had fallen by two-thirds over
the past year to 2009 lows, showed the fall in crude drilling
stabilising after a 50 percent price rally since February.
RIG/U
U.S. crude CLc1 fell 40 cents, or 1.0 percent, to $39.04 a
barrel by 0001 GMT. The market on Friday climbed to $41.20 a
barrel, its highest since early December, before losing ground
to settle down nearly 2 percent at $39.44.
Over the past two months, prices have rallied after the
Organization of the Petroleum Exporting Countries (OPEC) floated
the idea of a production freeze at January's levels.
Brent crude's front-month contract LCOc1 was down 12 cents
at $41.08. It hit a high of $42.54 a barrel in the last session.
"The rebound in crude oil prices in the last month appears
to have stabilised the number of rigs at work in the U.S. shale
sector," ANZ said in a note to clients.
"After falling for six consecutive months, Baker Hughes data
showed U.S. oil rig counts increased by one to 387."
Global oversupply in oil had knocked crude prices down from
mid-2014 highs above $100 a barrel to 12-year lows earlier this
year, taking Brent to around $27 and U.S. crude to about $26.
The combination of declining oil output, smaller crude
stockpile builds and surging gasoline consumption in the United
States also helped the recovery, although some analysts said the
rally had been overdone.
The average price of a gallon of gasoline in the United
States gained nearly 25 cents in the past four weeks, according
to a survey released on Sunday.
Money managers raised bullish bets on U.S. crude to a
five-month high, data showed on Friday.