Oil holds below $70 as rising US drilling eases supply concern

Bloomberg

Oil traded below $70 a barrel as supply concerns eased after American drilling rose to the highest since 2015, and on growing investor optimism crude output in Libya may climb from early next year.
Futures in New York were little changed, following a 3.1 percent decline last week. Working US oil rigs increased by four to 873 last week, according to data released by oilfield services provider Baker Hughes. In Libya, BP Plc and Eni SpA could resume a project, setting the stage for the OPEC member to boost output, the country’s state oil company said.
Crude has fallen almost 10 percent after reaching a four-year high earlier this month as a darkening demand outlook, coupled with stock market routs around the world have spurred a flight from risk assets.
“There are signs that US production may pick up again with an increasing rig count, which could limit oil from rising higher,” Ahn Yea Ha, a commodities analyst at Kiwoom Securities Co., said by phone from Seoul.
West Texas Intermediate for November delivery, which expires on Monday, traded 48 cents higher at $69.60 a barrel on the New York Mercantile Exchange in London. The contract declined $2.22 to $69.12 last week, falling for a second straight week. Total volume traded was about 14 percent below the 100-day average.
Brent for December settlement was at $80.24 a barrel on the London-based ICE Futures Europe exchange, up 46 cents. The contract fell 0.8 percent to $79.78 last week. The global benchmark crude traded at a premium of $10.51 to WTI for the same month.
American explorers expanded drilling activity in oilfields for a second week despite a dramatic pullback in the frack work needed to put the finishing touches on new wells. More than 100 additional rigs have been deployed across US fields this year. American crude production has remained above 10 million barrels a day since February.
In Libya, National Oil Corp. Chairman Mustafa Sanalla expects BP and Eni will resume exploratory drilling near the Tunisian border in the first quarter, which will increase the country’s oil output by “ hundreds of thousands of barrels” a day. The companies, which reached an agreement on Oct. 8, could “fast-track” to production thanks to existing facilities in the area, he said.