Brent, WTI Prices Rise on Lower US Drilling Activity

Oil prices rose on Monday, lifted by a drop in drilling activity in the United States.

US WTI crude futures were at $65.20 barrel, up 26 cents, or 0.4%, from their previous settlement. Brent crude futures were at $69.78 per barrel, up 44 cents, or 0.6%, Reuters reported.

Stephen Innes, the head of trading for Asia/Pacific at futures brokerage OANDA in Singapore, said prices were supported by a weekly report that there was a drop in activity of drilling for new oil production in the US.

Drillers there cut seven oil rigs in the week to March 29, bringing the total count down to 797, General Electric Company’s Baker Hughes energy services firm said in its closely followed report last Thursday. It was the first time in three weeks that the rig count fell.

A surge in drilling since 2016 has pushed up US crude production to 10.43 million barrels per day, taking it past top exporter Saudi Arabia.

Oil prices have generally been supported by supply restraint led by the Organization of Petroleum Exporting Countries and Russia, which started in 2017 to rein in oversupply and prop up prices. Despite this, Russian oil output rose in March to 10.97 million bpd in March, up from 10.95 million bpd in February, Energy Ministry data showed on Monday, putting Russia ahead of the US as the world’s biggest crude producer.

Output in Iraq, OPEC’s second-biggest producer, has also been above the agreement, at around 5 million bpd in early 2018, versus the 4.4 million bpd stipulated in the deal.