Oil trades near $53 as US drilling accelerates

Oil traded near $53 a barrel after drilling in the US climbed to the highest in more than a year, countering the Organization of the Petroleum Exporting Countries  (Opec)’s efforts to clear a supply glut.

Futures were little changed in New York after falling 1.1 per cent on Friday. Rigs targeting crude in the US rose last week to the most since November 2015, according to Baker Hughes, while US crude output is at the highest since April, government data shows. Oil supplies from Opec are sliding this month, according to tanker-tracker Petro-Logistics SA.

Oil has fluctuated above $50 a barrel since 11 nations including Russia last month joined with the Opec to trim supply. While Saudi Arabia says more than 80 per cent of the targeted cuts have been implemented since the deal took effect on January 1, the International Energy Agency predicted a gain in US shale output as prices rise. 

“Yet another good shale oil week,” said Bjarne Schieldrop, chief commodities analyst at SEB AB in Oslo. “OPEC’s decision to cut production has lifted prices,” and this “will accelerate the revival of U.S. shale oil production.”

West Texas Intermediate for March delivery fell as much as 33 cents to $52.84 a barrel on the New York Mercantile Exchange and was at $53.16 at 1:06 p.m. in London. Total volume traded was about 17 percent below the 100-day average. The contract slid 61 cents to $53.17 on Friday.