Publications
Partners
Hong Kong - Oil extended declines after US producers increased drilling as the market contends with an overhang of crude inventories at the highest seasonal level in at least three decades.
Futures lost as much as 0.7% in New York after slipping 0.2% on Friday. Rigs targeting crude rose for a seventh consecutive week to the highest level since February, Baker Hughes said on its website. Output from Organisation of Petroleum Exporting Countries (Opec) member Libya has expanded to 560 000 barrels a day, according to an official at National Oil Corp. This compares with a reported production rate of 540 000 a barrels a day last week.
Oil has fluctuated near $50 a barrel amid speculation over the ability of the Opec to implement an agreement to reduce supply. An Opec committee will meet later this month to try and resolve differences over how much individual members should pump and Libya is among countries exempt from the output cut.
“Oil looks vulnerable to the downside and a slide under $50 a barrel is quite likely,” said Michael McCarthy, chief market strategist in Sydney at CMC Markets. “There is some support for West Texas around $48, but if we breach that level, we’re looking for a pullback toward $45.”
West Texas Intermediate for November delivery fell as much as 36 cents to $49.99 a barrel on the New York Mercantile Exchange and was at $50.18 at 11:55 in Hong Kong. The contract dropped 9 cents to $50.35 on Friday. Total volume traded was about 32% below the 100-day average.
Rig count
Brent for December settlement was 7 cents lower at $51.88 a barrel on the London-based ICE Futures Europe exchange. The contract lost 0.2% to $51.95 on Friday. The global benchmark crude traded at a premium of $1.29 to WTI for December.
US producers added four rigs to 432 last week, Baker Hughes said on Friday. Explorers have now added more than a hundred rigs since a steady expansion began in June. The nation’s crude inventories expanded to 474 million barrels through October 7, according to data from the Energy Information Administration.
Oil-market news:
India’s billionaire Ruia brothers agreed to sell a 98% stake in their refinery unit to Russia’s Rosneft PJSC and a consortium of Trafigura Group and United Capital Partners for about $13bn. Iran is boosting efforts to woo foreign investment in its energy industry, with a request for companies to submit documents to pre-qualify as bidders to develop the country’s oil and natural gas fields.
