Investing.com – prices fell in Asia on Monday as the market took note of fresh additions to the US rig count last week and strong production in the United States.
US West Texas Intermediate (WTI) crude futures for January delivery eased 0.51% to $57.07 a barrel. ICE Brent dropped 0.38% to $63.09 a barrel.
Oil traders this week will look at monthly reports from OPEC and the International Energy Agency (IEA) to assess global oil supply and demand levels. The data will give traders a better picture of whether a global rebalancing is taking place in the oil market.
Last week, oil finished higher on Friday, boosted by signs of rising crude demand in China, but prices failed to avoid a weekly loss amid concerns over rising production in the U.S.
Meanwhile, February futures, the benchmark for oil prices outside the U.S., jumped $1.20, or roughly 1.9%, to settle at $63.40 a barrel by close of trade. For the week, Brent suffered a loss of about 0.6%.
Crude futures were buoyed by data showing China’s oil imports rose to 9.01 million barrels per day (bpd) last month, the second highest on record, data from the General Administration of Customs showed on Friday. Booming demand will push China ahead of the United States as the world’s biggest crude importer this year.
Threats of a strike later this month from a union in Nigeria, Africa’s largest oil exporter, was also supportive.
However, fears that rising U.S. output would dampen OPEC’s efforts to rid the market of excess supplies prevented prices from rising much further, according to market participants.
U.S. energy companies added two oil rigs in the week to Dec. 8, bringing the total count up to 751, the highest since September, General Electric (NYSE:NYSE:)’s Baker Hughes energy services firm said in its closely followed report on Friday.
Domestic U.S. output has rebounded by almost 15% since the most recent low in mid-2016, and increasing drilling activity for new production means output is expected to grow further, as producers are attracted by climbing prices.
U.S. oil production rose to 9.71 million bpd last week, according to government data released during the week, the highest level since the early 1970s and close to the output of top producers Russia and Saudi Arabia.
The Organization of Petroleum Exporting Countries (OPEC), along with some non-OPEC producers led by Russia, agreed last month to extend current oil output cuts for a further nine months until the end of 2018. The deal to cut oil output by 1.8 million barrels a day (bpd) was adopted last winter by OPEC, Russia and nine other global producers. The agreement was due to end in March 2018, having already been extended once.
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