Oil Price Rises As Production Cuts Start

Oil rebounded from the biggest drop in a week amid signs that prices near a 5 1/2-year low are slowing drilling in the U.S.

Futures rose as much as 2.7 percent in New York and 2.5 percent in London. BHP Billiton Ltd., the largest overseas investor in U.S. shale, said it will cut the number of active drill rigs in the nation by almost 40 percent. The rapid decline in oil prices may deter investment in all types of energy needed to meet future demand, the head of the International Energy Agency said.

“The market is trying to stabilize,” said Tariq Zahir, a New York-based commodity fund manager at Tyche Capital Advisors. “You are seeing the rig count coming down. Production will take some time to come off. The U.S. economy is looking pretty good and demand will pick up.”

via Bloomberg

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza