Latest Statistics on US Drilling Rigs Boost Oil Price
Oil prices rose for the fourth straight week as reports from the United States of America revealed further closures of oil drilling rigs.
Oil-field-services firm Baker Hughes Inc. said Friday that the number of rigs drilling for oil in the U.S. fell by 42 to 760 in the latest week, the largest drop in four weeks. The number of oil-drilling rigs has declined for 18 straight weeks as producers have cut spending on new output because of low oil prices. Most of the decline was in the Eagle Ford and Permian shales, key regions for shale-oil production.
Light, sweet crude for May delivery settled up 85 cents, or 1.7 per cent, to $51.64 a barrel Friday on the New York Mercantile Exchange. Prices rose 5.1 per cent in the week.
Brent, the global benchmark, rose $1.30, or 2.3 per cent, to $57.87 a barrel on ICE Futures Europe, posting a 5.3 per cent weekly gain.
The moves capped a volatile week of trading, as investors continued to assess the global glut of oil that sent prices plunging in 2014.
The latest rig-count data “signal that U.S. production is a lot closer to topping,” said Phil Flynn, analyst at Price Futures Group in Chicago. “The mood seems to be shifted more toward the bullish side.”
The rig count can be an early indicator for output, though producers have also increased the amount of oil they can extract from an individual well and production has continued to rise in recent weeks.
Traders also eyed geopolitical uncertainties, including unrest in the Middle East and a potential final deal over Iran’s nuclear program.
