Oil Holds Near $68 as Rising U.S. Drilling Counters OPEC Curbs

Futures in New York dropped as much as 0.8 percent after data showed American drillers added five working oil rigs last week, stoking fears over surging U.S. output. The May oil contract gained 1.5 percent last week before expiring Friday as OPEC producers said supply curbs should continue in order to revive investments in oil and gas production.

Crude rallied this month to levels not seen since 2014 as geopolitical tensions ramp up in the energy-rich Middle East. While the Organization of Petroleum Countries and its allies wiped out 97 percent of the targeted surplus that has weighed on prices for three years, the cuts should continue, Saudi Arabia said during last week’s meeting of oil producers in Jeddah. Meanwhile, President Donald Trump on Friday slammed OPEC for artificially boosting prices.

“The fundamental dynamics of the oil market are highly affected by the OPEC output-cut agreement, and continuously increasing U.S. crude oil production,” said Michael Poulsen, an analyst at Global Risk Management Ltd.

In the U.S., explorers have added 23 rigs so far this month, bringing the total working rigs to 820 last week, Baker Hughes data showed. The nation’s crude production has more than doubled from the lows of a decade ago, topping 10 million barrels a day each week since early February.
more at:  https://www.bloomberg.com/news/articles/2018-04-23/oil-trades-below-69-as-u-s-rig-count-climbs-to-three-year-high