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Oil turns lower as markets shift focus back to U.S. drilling activity

Published 2017-04-24, 09:47 a/m
© Reuters.  Oil turns lower
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Investing.com - Oil prices were lower in North American trading on Monday, reversing overnight gains as investors turned their attention back to rising production in the U.S.

The U.S. West Texas Intermediate crude June contract fell 23 cents, or around 0.5%, to $49.40 a barrel by 9:45AM ET (13:45GMT). The U.S. benchmark touched its lowest since March 29 on Friday at $49.20.

It lost $3.35, or almost 7%, last week, the steepest drop in over a month.

Elsewhere, Brent oil for June delivery on the ICE Futures Exchange in London shed 10 cents to $52.34 a barrel after sliding to $51.57 in the prior session, its cheapest since March 29.

London-traded Brent futures recorded a loss of $3.59, or 7%, last week.

U.S. drillers last week added rigs for the 14th week in a row, data from energy services company Baker Hughes showed on Friday, extending a 10-month drilling recovery.

That brought the total count to 688, the most since September 2015, underlining concern that an ongoing rebound in U.S. shale production could derail efforts by other major producers to rebalance global oil supply and demand.

In November last year, OPEC and other producers, including Russia agreed to cut output by about 1.8 million barrels per day between January and June, but so far the move has had little impact on inventory levels.

A final decision on whether or not to extend the deal beyond June will be taken by the oil cartel on May 25.

Oil was higher earlier in the session as demand for riskier assets improved after French election results eased fears over the future of the euro zone.

Meanwhile, U.S. President Donald Trump will sign several executive orders on energy and the environment this week, which would make it easier for the United States to develop energy on and offshore, a White House official said on Sunday.

Elsewhere on Nymex, gasoline futures for June inched down 1.2 cents, or about 0.7%, to $1.632 a gallon, while June heating oil slipped 0.4 cents to $1.555 a gallon.

Natural gas futures for June delivery dropped 4.6 cents to $3.146 per million British thermal units.

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