Oil prices extend losses after U.S. rig count rises for first time in 13 weeks
London (Mar 21) Crude oil prices fell on Monday, extending a decline seen late last week after the first rise in the number of active U.S. oil-drilling rigs in 13 weeks. West Texas Intermediate crude futures for April delivery CLJ6, -1.24% fell 50 cents, or 1.3%, to $38.94 a barrel. The contract, which expires at Monday’s settlement, closed down 1.9% on Friday at $39.44 a barrel, after pushing above $41 during that session.
May crude CLK6, -0.51% dropped 35 cents, or 0.9%, to $40.78 a barrel. Oil still managed a fifth weekly rise last week.
May Brent crude LCOK6, +0.07% the global benchmark, meanwhile, fought off losses and rose 3 cents, or 0.1%, to $41.23 a barrel.
On Friday, Baker Hughes BHI, +1.35% reported that the number of active U.S. oil-drilling rigs increased by 1 to 387 — the first in 13 weeks — though total active domestic oil rigs fell by 4 to 476.
After that rig data was announced, WTI crude, which had touched lows under $40 ahead of the release, added to losses.
“While the [rig count] rise was marginal – only one in fact – it bucks the trend of declining rigs that has offered support to oil prices this year and driven expectations that production will fall and supply will fall more in line with demand,” Craig Erlam, senior market analyst at Oanda, wrote Monday.
“This is the first real test of oil bulls ability to drive a broader correction in price, with this news potentially sparking oversupply fears once again,” he said.
Oil still managed a fifth weekly rise last week, spurred by ongoing hopes that an April 17 meeting in Doha, Qatar between major oil producers could lead to higher prices.