Oil edged up to about $49 a barrel on Monday after fewer drilling rigs were added in the United States last week, helping ease concerns that surging shale supplies will undermine OPEC-led production cuts.
U.S. drillers added two oil rigs in the week to July 14, bringing the total to 765, Baker Hughes (BHGE.N) said on Friday. RIG-OL-USA-BHI Rig additions over the past four weeks averaged five, the slowest pace of growth since November.
A sharp drop in U.S. crude inventories in the week to July 7 supported prices last week. [EIA/S] But crude stocks in industrialised nations remained high, putting a brake on the oil price rally. [IEA/M]
“The market is not doing too much today – it feels like wait and see,” said Olivier Jakob of oil analyst Petromatrix. “There is some rebalancing in products, but overall the layers of stocks are still very large.”
Brent crude LCOc1, the global benchmark, was up 8 cents at $48.99 a barrel by 1341 GMT. U.S. crude CLc1 traded at $46.57, up 3 cents.
Oil prices are less than half their mid-2014 level because of a persistent glut, even after the Organization of the Petroleum Exporting Countries with Russia and other non-OPEC producers cut supplies since January.