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By Bloomberg

Oil declined in New York, extending its second weekly loss after the slowest drop in U.S. drilling rigs since January, signaling supply is still plentiful.

Futures decreased as much as 2.1 percent in New York. Rigs targeting oil in the U.S. fell by 33 to 986, the smallest decline in eight weeks, Baker Hughes Inc. said on its website Friday. Prices need to fall further before production is sufficiently curbed to balance the market, Goldman Sachs Group Inc. estimates. The Organization of Petroleum Exporting Countries boosted output to 30.6 million barrels a day in February, according to a Bloomberg survey.

While U.S. drillers have pared operations in response to oil’s slump, with the Baker Hughes data showing the number of rigs in service falling for 12 weeks to the lowest since June 2011, the nation’s production is still the highest in three decades. Companies are becoming more efficient and can resume idled projects quickly, according to Goldman Sachs.

“Prices will have to move lower first to create a meaningful impact on supply,” Miswin Mahesh, an analyst at Barclays Plc in London, said in a report. “We expect further weakness ahead” in prices as “the fundamental oversupply in the market weighs in.”

Brent Premium

WTI for April delivery slid as much as $1.05 to $48.71 a barrel in electronic trading on the New York Mercantile Exchange and was at $48.91 at 12:48 p.m. London time. The contract rose $1.59 to $49.76 on Feb. 27, capping a 3.2 percent gain for the month. The volume of all futures traded was about 32 percent below the 100-day average for the time of day.

Brent for April settlement dropped $1.22, or 2 percent, to $61.36 a barrel on the London-based ICE Futures Europe exchange. It advanced $2.53 to $62.58 on Friday. Prices rose 18 percent in February, the most since May 2009. The European benchmark crude was at a premium of as much as $12.99 to WTI, the widest since January 2014.

The current rig count implies output growth of 385,000 barrels a day by the fourth quarter from a year earlier, down 55,000 barrels a day from last week’s estimate, Goldman Sachs said in a report e-mailed Monday. The slowdown points to growth decelerating close to levels needed to balance the market, it said.

U.S. Inventories

Crude stockpiles in the U.S., the world’s biggest oil consumer, increased by 8.43 million barrels to 434.1 million through Feb. 20, according to data from the Energy Information Administration. The nation’s output rose to 9.29 million barrels a day, the highest level in weekly data from the Energy Department’s statistical arm since January 1983.

Saudi Arabia’s output advanced last month by 130,000 barrels a day to 9.85 million a day, the highest level since September 2013, a Bloomberg survey of companies, producers and analysts showed. The country pumps the most crude among the 12 nations of OPEC, which supply about 40 percent of the world’s oil.

Oil may trade at $64 to $65 a barrel in the near term, Adel Abdul Mahdi, Iraq’s oil minister, said Sunday. OPEC’s second- biggest producer plans to ship more than 3 million barrels a day of oil in March after exporting more than 2.5 million a day in February, he said. The Bloomberg survey for February put Iraq’s output at 3.45 million barrels a day.

Hedge funds raised bearish wagers on WTI by 17 percent to an all-time high of 117,646 contracts in the seven days ended Feb. 24, U.S. Commodity Futures Trading Commission data show. Net-long positions slid 3.1 percent to 202,609 lots, the lowest in seven weeks.

Money managers raised their net-long positions in Brent crude for a third week in the period to Feb. 24, data from ICE showed. Bullish wagers increased to 182,783 contracts, remaining at their highest level since July in futures and options combined.