Oil rises, but USA drilling drags

Marco Green
June 26, 2017

Brent crude oil futures rose 0.32 dollar or 0.71 percent to close at USD 45.54 a barrel at NYMEX.

U.S. West Texas Intermediate (WTI) crude futures were up 44 cents, or 1.0 percent, at $43.45 per barrel.

World oil prices are rising on June 26 despite the report about the increasing number of drilling rigs in the US.

Oil prices moved upwards during Monday's trade on the back of a weaker dollar, but rise in United States drilling activity infused worries that a global supply glut would persist despite efforts by some producers to trim output.

A bear market is theoretically defined by an asset price falling by 20 percent or more from a peak, a box the oil price has ticked given the drop of almost 21 percent since the 2017 high of $58.37 struck in early January. "I suspect short covering", said Ric Spooner, chief market analyst at CMC Markets in Sydney. A weaker dollar also makes oil cheaper for countries using other currencies. "A slightly weaker USA dollar also helped improve investor appetite".

In May, OPEC and some non-OPEC producers extended a deal to cut 1.8 million barrels per day in supply until March 2018.

US drillers last week added rigs for the 23rd week in a row, according to data from energy services company Baker Hughes, the longest such streak on record.

Investors in diesel futures and options added to their bullish bets, raising their net long holdings by 4,122 contracts to 9,012 lots in the same week.

Other reports by Click Lancashire

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