Oil falls as Opec output curbs offset by growth in US drilling

Hong Kong - Oil fell for the first time in four days as an increase in US drilling activity fanned speculation that Organisation of the Petroleum Exporting Countries (Opec) production cuts could revive output in North America.

Futures slid as much as 1.7% in New York after rising 3.2% the previous three sessions. Gulf oil producers Saudi Arabia, the United Arab Emirates, Qatar, Oman and Kuwait are implementing the cuts they promised, Nawal Al-Fezaia, Kuwait’s Opec governor, said in an interview on Monday in Kuwait City.

Still, that wasn’t enough to revive prices after data from Baker Hughes on Friday showed that US drillers added rigs for the 10th straight week to the highest level in a year.

Oil last year capped its biggest annual gain since 2009 as Opec and 11 other nations agreed to curb output starting January 1 in an effort to trim a global inventory glut. While producers from Iraq to Kuwait say they have started to curb supply, an increase from countries such as Libya, which is from cuts, could put pressure on prices.

“Developments over the weekend are putting the oil complex under fresh pressure,” said Tamas Varga, an analyst at brokerage PVM Oil Associates Ltd. in London.

West Texas Intermediate for February delivery lost as much as 89 cents to $53.10 a barrel on the New York Mercantile Exchange and was at $53.21 at 9:49 in London.

Total volume traded was about 25% below the 100-day average. The contract rose 23 cents to $53.99 a barrel on Friday to cap a fourth weekly gain.

Rig count

Brent for March settlement fell as much as $1.01, to $56.09 a barrel on the London-based ICE Futures Europe exchange.

The global benchmark crude traded at a premium of $2.17 to March WTI.

US drillers boosted the rig count by 4 to 529 last week, according to data on Friday from Baker Hughes. It’s the highest level since the week ended January 1, 2016. Companies have added more than 100 rigs since the end of September.

Russian oil output fell to 11.114 million barrels a day in the period from January 1 to January 8, from 11.247 million a day in October, according to data from the Energy Ministry’s CDU-TEK unit.

Niger Delta Avengers will resume attacks on Nigerian oil facilities, a spokesperson for the group said in a statement on a website.

Libya is working to re-open more oil fields, including El-Feel, National Oil Corporation chairperson Mustafa Sanalla said in a statement on the state-run company’s website.

Iraq’s oil exports from its southern ports reached a record average high in December, Oil Minister Jabbar Al-Luaibi said in an e-mailed statement.