London - Oil held above $53 a barrel, after spending last week in the smallest trading range in 13 years as investors weighed rising U.S. drilling activity against OPEC production cuts.
Futures rose 0.7% in New York after fluctuating in the narrowest range since January 2004. US drillers boosted the rig count to the highest since October 2015, Baker Hughes said on Friday. Meanwhile, hedge funds raised net-long positions on West Texas Intermediate to a record, according to Commodity Futures Trading Commission data.
Oil has held above $50 a barrel since the Organisation of Petroleum Exporting Countries and 11 other nations started trimming supply on January 1 to ease a global glut. While Goldman Sachs predicts the market will shift into deficit during the first half of this year, US crude stockpiles have increased the past six weeks to the highest level in more than three decades.
“Prices continue to be pulled between the contradictory influences of reports of falling OPEC production and rising U.S. crude inventories,” said David Martin, an analyst at JPMorgan in London.
WTI for March delivery, which expires on Tuesday, was 38c higher at $53.78 a barrel on the New York Mercantile Exchange at 12:24. Transactions on Monday will be booked Tuesday for settlement purposes because of the US Presidents’ Day holiday. Total volume traded was about 30% below the 100-day average. The more-active April contract rose 36 cents to $54.14.
Brent for April settlement gained 44c to $56.25 a barrel on the London-based ICE Futures Europe exchange. Prices rose 16c to $55.81 on Friday. The global benchmark traded at a premium of $2.11 to April WTI.
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Rigs targeting crude in the U.S. increased by 6 to 597, according to data from Baker Hughes. Drillers have added 72 rigs this year. American oil production is near the highest level since April, according to government data.
Hedge funds boosted their net-long position on WTI by 8.6% in the week ended February 14, CFTC data show. That’s the highest level on record, showing speculators are taking OPEC cuts seriously.
China National Petroleum bought a stake in Abu Dhabi’s largest oil concession as the Middle Eastern emirate with 6% of global crude reserves looks to Asia for investment to raise output capacity.
Platts will add Norway’s Troll crude to North Sea benchmark Dated Brent from the start of 2018, adding about 20% of deliverable supply to the basket, the company said at its London Oil and Energy Forum.