Crude prices keep declining since early January
By Sara Israfilbayova
World oil prices continue to decline amid week-long data on the growth of oil drilling rigs in the U.S.
Brent crude futures were down 36 cents at $68.22 a barrel, while U.S. West Texas Intermediate (WTI) crude fell 13 cents to $65.32, according to Reuters.
“Oil is caught up in this general risk-off move, not helped at the margins by a little bit of strength in the U.S. dollar,” said Ric Spooner, chief market analyst at CMC Markets in Sydney.
Baker Hughes reported that the number of drilling rigs in the U.S. has grown for the second week in a row. Over the past week, the number of drilling rigs has increased by six to 765, indicating the growth in production in the near future.
After a minimum of production in mid-2016, the U.S. oil production grew by about 20 percent. Increasing drilling activity means that production in the U.S. will grow as producers want to take advantage of rising prices.
Last week, oil production in the U.S. rose to 9.91 million barrels per day, which was the largest index since the early 1970s and approached production in Russia and Saudi Arabia.
This week, market participants will follow up on fresh data on crude oil and petroleum products in the U.S., which will be published on February 7-8. This will indicate the level of demand of the largest consumer in the world.
In November 2016, the OPEC summit was held in Vienna, where OPEC members reached an agreement on reducing oil output by 1.2 million barrels per day. In December 2016 was a meeting of oil producers outside the OPEC. The meeting ended with signing an agreement to reduce oil production by a total of 558,000 barrels per day starting from January 2017.
OPEC and its partners decided to extend its production cuts till the end of 2018 in Vienna on November 30, as the oil cartel and its allies step up their attempt to end a three-year supply glut that has savaged crude prices and the global energy industry.
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