Oil extends advance towards $58 as US drillers trim rig count

Bloomberg

Oil extended gains toward $58 a barrel as US drillers targeting crude reduced the rig count for the first time in four weeks. Futures added 0.7 percent in New York after rising 0.5 percent. US explorers trimmed the number of rigs by four to 747 last week, according to Baker Hughes data. Hedge funds have boosted bets on rising prices to a record for Brent crude, while those for West Texas Intermediate remain near a nine-month high, exchange and government data showed last week.
Oil is set for a second yearly gain as the Organization of Petroleum Exporting Countries and its allies trim production to drain a global glut. While the group has extended cuts through the end of 2018, it faces rising output from the US, which is forecast to surge next year to a record 10 million barrels a day.
“Investors remain bullish on oil as global growth looks strong, OPEC has extended cuts throughout 2018 and geopolitical risk has made its way back to the oil market,” said Jens Naervig Pedersen, an analyst at Danske Bank A/S in Copenhagen.
WTI for January delivery, which expires on Tuesday, rose 42 cents to $57.72 a barrel on the New York Mercantile Exchange as of 10:22 a.m. in London. Total volume traded was about 23 percent below the 100-day average. Brent for February settlement gained 58 cents to $63.81 a barrel on the London-based ICE Futures Europe exchange. Prices fell 0.3 percent last week. The global benchmark traded at a premium
of $6.08 to February WTI.
The Brent net-long position — the difference between bets on a price increase and wagers on a drop — rose 1.8 percent to a record 544,051 contracts, according to data from ICE Futures Europe. Money managers cut their WTI net-long position by 0.4 percent to 390,874 futures and options in
the week ended December 12, the US Commodity Futures Trading Commission said.