Investing.com – Crude
gained in Asia on Monday with the front-month contract up following
a drop in U.S. drilling activity last week.
On the New York Mercantile Exchange, crude oil for delivery in
March gained 0.85% to $32.02 a barrel.
Last week, oil prices fell sharply on Friday, as market players
continued to focus on a global supply glut and amid doubts over the
likelihood of a collective cut happening anytime soon.
On Friday, consultant Baker Hughes said the U.S. rig count fell
by 26 to 413 in the week ended Feb. 19.
But the U.S. Energy Information Administration said Thursday
that U.S. crude stockpiles increased by 2.1 million barrels last
week to an all-time high of 504.1 million barrels, underlining
concerns over a domestic supply glut.
Supplies at Cushing, Oklahoma, the key delivery point for Nymex
crude, rose by 36,000 barrels last week, raising fears that the
nation's largest storage facility is nearing full capacity.
Elsewhere, on the ICE Futures Exchange in London, Brent oil for
April delivery slumped $1.27, or 3.7%, on Friday to close the week
at $33.01 a barrel.
On the week, London-traded Brent futures declined 35 cents, or
1.04%, the third consecutive weekly drop. Futures were up as much
as 14% earlier in the week on Saudi Arabia and Russia's agreement
to freeze output at January levels.
Brent prices pushed lower on Friday as investors expressed
skepticism that the deal could be completed. While Iran oil
minister Bijan Zanganeh said that he supported any measure that
would help stabilize global oil markets, he stopped short of
committing to a freeze in Iranian production, raising the question
of whether the agreed parties will stay committed to the plan.
Brent prices are down almost 12% in 2016 as investors worried
that a huge oversupply in crude was coinciding with a global
Oil futures are down nearly 70% since the summer of 2014. Global
crude production is outpacing demand following a boom in U.S. shale
oil and after a decision by OPEC last year not to cut production in
order to defend market share.
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