Rig count hangover bruises crude oil prices

Saudi Arabia's crude oil exports dropped by about 300,000 barrels per day (bpd) in January, official data showed on Monday, as the top OPEC producer played its part in a global supply-cut pact to support prices and ease a glut.

As of 8am GMT (4 pm Singapore time), prices for benchmark Brent crude futures were down 34 cents, or 0.66 per cent, at US$51.42 (S$72) per barrel.

US West Texas Intermediate (WTI) crude futures were down 46 cents, or 0.94%, at $48.32 a barrel.

According to traders, the oil prices have been squeezed by rising USA drilling activity, in addition to supplies from OPEC countries despite their previous comments on cutting crude oil production by 1.8 million barrels per day, in association with Russian Federation.

Baker Hughes reported that in the week leading up to 17 March, US shale companies added 14 oil rigs, increasing the number of operating rigs to 631, the most since September 2015. This extends a recovery that is expected to boost shale production next month by the most in six months.

Riyadh led OPEC and other producers in December to reach their first deal since 2001 to curtail oil output and prop up weak oil prices which had strained many producers' budgets.

Oil futures have retreated in the past two weeks as a supply overhang driven by rising production from the United States overshadows a deal by OPEC and other producers to reduce output. Estimates of the compliance rate vary, but OPEC says that the parties to the recent agreement implemented 94% of their pledged production cuts by February. So far, crude oil prices and broader markets such as the S&P 500 (SPY) (SPX-INDEX) are diverging in 2017.

OPEC next meets to decide output policy on May 25 in Vienna.

US oil output has surged to over 9.5 million barrels per day from 8.5 million barrels per day in June of the previous year.

"We can't do what we did in the '80s and '90s by swinging millions of barrels in response to market conditions", he said. At the same time Russian Federation and other non-OPEC producers' adherence to agreed cuts in the period was only at 37%.

Libya's Es Sider and Ras Lanuf ports will restart shipping oil in one week to 10 days, Jadalla Alaokali, a board member at National Oil Corp., said by phone.

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