Return to: Employment News

Oil Increases above $61 after pullback in U.S. drilling

After the ease in the U.S. drilling activity, there is considerable increment in oil. It seems that the global crude surplus is lessening now. According to the Baker Hughes Data, the West Texas Intermediate futures gained 0.4%, after rise of 1.7% last week, when they hit a three-year high. Rigs drilling for crude in the U.S. fell by five to 742 in the seven days which ended Jan. 5.
Michael Poulsen, Analyst at Global Risk Management Ltd stated, “A drop in active oil rigs is usually bullish for oil prices,” Since 2013, oil had its outstanding opening week for any year because the stockpiles of U.S. is consistently shrinking. On the other hand, the output curbs by the Organization of Petroleum Exporting Countries and its allies have increased its prices. Moreover, the crude has been taken to a level where profits are quite high to boostthe shale producers in America to drive more. During the week ended in Jan 2, Hedge funds have taken a back foot from the most bullish stance on WTI in 10 months.
On the New York Mercantile Exchange, WTI for February delivery was at $61.69/bbl, up 25 cents, as of 2:02 p.m. in London. However, the total volume traded was approximately 8% below the 100-day average. On Friday, prices lost 57 cents to $61.44.
On the London-based ICE Futures Europe exchange, Brent for March settlement increased 20 cents to $67.82/bbl, whereas the front-month prices increased about 1.1% last week. At a premium of $6.13 to March WTI, the global benchmark crude has been traded.
During the five final weeks of 2017, the U.S. explorers spent them in a virtual standstill. They just keep adding as many rigs as they laid off. Hence, they are bowing to the increased pressure of investors. Drillers are also planning to do more with less in a bid for pumping profits. Some of the their money-saving steps are opening already-drilled wells by fracking them instead of deploying more rigs to start new ones.
According to Stephen Brennock, an analyst at PVM Oil Associates Ltd. in London, “It is clear to see that the U.S. shale patch has a number of chinks in its armor,”
According to data reports from the U.S. Commodity Futures Trading Commission on Friday, money managers are cutting their WTI net-long position -- the difference between bets on a price increase and wagers on a drop -- by 3.8% to 396,381 futures and options in the week ended Jan. 2. Longs drop by 3.8 percent, and shorts decreased by 4.3%. However, as ICE Futures Europe data showed on Friday, there increase in the Net-long positions on Brent to a rec ...

News Release: Oil Increases above $61 after pullback in U.S. drilling
Submitted on: January 11, 2018 11:49:47 AM
Submitted by: petroleague
On behalf of: