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Oil stable on lower U.S. rig count, but below recent highs

Reuters  |  SINGAPORE 

By Gloystein

(Reuters) - prices were stable on Monday, supported by a slight decline in the number of U.S. rigs drilling for new production, with crude holding just below near three-year highs reached last week.

U.S. Intermediate (WTI) crude futures were at $61.50 a barrel at 0800 GMT, 6 cents above their last settlement. Futures reached $62.21 last week, the most since May 2015.

Brent crude futures were at $67.66 a barrel, 4 cents above their last close. Brent hit $68.27 high last week, the highest since May 2015.

Traders said the gains were due to a slight decline in the number of U.S. rigs drilling for new production, which eased by five in the week to Jan. 5 to 742, according to data from services firm

Despite this, U.S. production is expected to break through 10 million barrels per day (bpd) very soon, largely thanks to soaring output from shale drillers. Only top producers and produce more.

"The U.S. price is now into a range that is anticipated to attract increased shale production," said Ric Spooner, at in

"Traders may decide that discretion is the better part of valour while markets wait on evidence of what happens to the rig count and production levels over the next couple of months."

Rising U.S. production is the main factor countering production cuts led by the Middle East-dominated Organization of the Petroleum Exporting Countries (OPEC) and by Russia, which began in January last year and are set to last through 2018.

Stephen Innes, of trading for Asia/Pacific at in Singapore, said "the OPEC vs shale debate will rage" this year, being a key price driving factor.

However, Innes added that turmoil would remain a key focus for markets, which he warned had the potential to "send prices rocketing higher".

(Reporting by Gloystein and Florence Tan; Editing by and Christian Schmollinger)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Mon, January 08 2018. 13:40 IST