Drillers in most of the USA removed 9 oil rigs in the week ended October. 9, sending the total rig number down to 605, oil firm Baker Hughes Inc (NYSE: BHI) disclosed, Friday. The oil rig count is at its lowest level since July 2010.
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US West Texas Intermediate (WTI) crude futures were trading at $50.09 a barrel at 4.42am GMT, up 46c from their last settlement.
Pressure lingered on the USA dollar as markets priced the possibility that the Federal Reserve would not begin a tightening cycle this year. Venezuela, whose economy has been decimated by low oil prices, this month will unveil a bold new strategy to revive them, taking a page from OPEC’s history books with a proposed price band to build an automatic floor for prices at $70 a barrel.
Since hitting a record high of 1,609 during this week a year ago, weekly rig count reductions have averaged 20.
Oil prices had gotten a lift early in the day from a report by the Organization of the Petroleum Exporting Countries that pointed to deeper cuts in non-OPEC oil output and said factors that have depressed crude prices are ‘starting to show signs of alleviation’.
“This points to a further decline in United States oil production, which according to figures from the US Energy Information Administration has already dropped by 600,000 barrels per day as compared with its spring peak”, says Commerzbank. “However, upside is likely (to be) limited, and we continue to see a range-bound market through year-end”, Morgan Stanley said.
Oil has been on a roller-coaster ride over the last few weeks, recovering from six-year lows in turbulent trade.
Researchers at Goldman Sachs, one of the most influential banks in the oil market, have questioned whether the rise in spot prices is justified by fundamentals.
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Drillers in Canada managed to add one rig last week after dropping three gas rigs but picking up four oil rigs.
