Oil price rises towards $70 on reduced USA drilling activity

Cornelia Mascio
Marzo 13, 2018

West Texas Intermediate, the US marker, is now near $62 a barrel.

Brent crude, which is the global benchmark of crude oil, had opened 2018 at $64.73.

"The rapidly growing US shale production is making it virtually impossible for prices to rise", according to analysts at Commerzbank.

Oil prices fell on Monday on expectations that USA output will rise this year, erasing earlier gains buoyed by lower weekly US rig counts and falling US unemployment.

Both crude benchmarks dropped by around 1% in their Monday sessions.

That has undercut some of the enthusiasm for oil, as investors weigh increased U.S. supply against the likelihood that the Organization of the Petroleum Exporting Countries and non-Opec producers will maintain supply cuts that have been in effect for more than a year.

The US economy added the biggest number of jobs in more than 1-1/2 years in February, with non-farm payrolls jumping by 313,000 jobs last month, the Labour Department said on Friday.

"It just looked like some profit taking", said Jim Ritterbusch, president of energy advisory firm Ritterbusch & Associates. "We have monthly reports from the International Energy Agency and OPEC in the coming days to influence prices, but for now, crude is having a downbeat start to the week, unwinding some of Friday's effervescent rally".

Hours before late Tuesday's American Petroleum Institute's and Wednesday's U.S. Energy Information Administration's weekly inventories report, traders are eying a surge in U.S. production that could push inventories in the U.S. higher.

USA stocks, though, were little changed on Monday, with the S&P 500 up 0.1 points, or 0.00 percent, to 2,786.67.

US stocks, though, were mixed on Monday, with the S&P 500 down 2.08 points, or 0.07 percent, at 2,784.49 and the Dow Jones Industrial Average lower by 127.52 points, or 0.5 percent, at 25,208.22.

MSCI's world equity index .

The country's light oil price was reported $65.43 on average since the beginning of 2018 until March 2. The dollar index fell 0.05 percent, with the euro up 0.06 percent to $1.2312.

The Japanese yen strengthened 0.37 percent versus the greenback to 106.39 per dollar, while sterling was last trading at $1.3906, up 0.40 percent on the day.

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