The price of oil has increased in value and exceeded $49/barrel today as US rig drilling has put concerns to rest regarding the possibility of surging shale supplies undermining OPEC approved cuts.
July 17, 2017 – Reuters
U.S. drillers added two oil rigs in the week to July 14, bringing the total to 765, Baker Hughes said on Friday. Rig additions over the past four weeks averaged five, the lowest since November.
“The slowing pace of increases combined with massive drawdowns last week on both official crude inventory numbers from the U.S. probably explains the positive sentiment in general at the moment,” said Jeffrey Halley at brokerage OANDA.
Brent crude , the global benchmark, was up 19 cents at $49.10 a barrel by 0844 GMT. U.S. crude traded at $46.71, up 17 cents.
Oil prices are less than half their mid-2014 level because of a persistent glut even after the Organization of the Petroleum Exporting Countries, plus Russia and other non-members started a supply-cutting pact in January.
U.S. crude oil inventories in the week to July 7, the most recent, dropped the most in ten months, raising expectations that a long-awaited market rebalancing is under way.