Oil edges up on reduced U.S. drilling activity, booming job market

Oil edges up on reduced U.S. drilling activity, booming job market

US West Texas Intermediate (WTI) crude futures fell 27c to $61.77 a barrel.

Brent crude futures were at $64.04 per barrel at 1353 GMT, down 45 cents from their previous close.

Brent crude oil could slide below $60/bbl as a surge in USA shipments to Asia threatens to undermine the production cut deal between OPEC and its allies, according to ING analysts, in contrast to bullish views from Goldman Sachs and others who see prices supported as strong demand soaks up supply from the U.S.

The West Texas Intermediate (WTI) for April delivery was down 0.68 US dollar to settle at 61.36 dollars a barrel on the New York Mercantile Exchange, while Brent crude for May delivery lost 0.54 dollar to close at 64.95 dollars a barrel on the London ICE Futures Exchange. Gross short positions on the New York Mercantile Exchange 3067651MSHT climbed to their highest in almost a month.

"Rising production and inventory in the U.S. has been reducing fund sentiment since it peaked at the end of January", ING said.

The US economy added the biggest number of jobs in more than 1-1/2 years in February, with non-farm payrolls jumping by 313,000 jobs last month, the Labor Department said on Friday.


Then, 617 rigs were active, and most analysts expect United States crude oil production, which has already risen by more than a fifth since mid-2016, to 10.37-million barrels a day to expand further.

"While Friday's favorable jobs data and oil rig decline might suggest a test of the high side of this expected range first, we still view downside price risk exceeding that to the upside", he said.

A difference of opinion between members the Organization of the Petroleum Exporting Countries over whether higher oil prices could stimulate US shale output and crash the market spilled out into the open at the weekend.

US production is expected to rise above 11 million bpd by late 2018, taking the top spot from Russian Federation, according to the International Energy Agency (IEA).

On Sunday, Iranian oil minister Bijan Zanganeh said OPEC could agree in June to begin easing current production curbs in 2019, the Wall Street Journal reported.

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