Oil trades near three-week high after US drilling slows

Bloomberg

Oil traded near the highest closing price in almost three weeks after US drilling slowed after a record expansion. Futures were little changed in New York after rising 8.3 percent the previous seven sessions. US drillers targeting crude reduced the number of active rigs for the first time in 24 weeks, according to Baker Hughes Inc. data.
Libya’s oil production climbed to more than 1 million barrels a day for the first time in four years, according to a person with direct knowledge of the situation.
While prices surged last week, oil in New York and London still posted a monthly loss in June after tumbling into a bear market on concerns that rising global supply will counter cuts from the Organization of Petroleum Exporting Countries and its partners. There are signs of a slowdown in
the US, but Libya is adding more
oil to the market as it restarts fields that are exempt from OPEC’s production curbs.
“A further pillar of price support came as the relentless surge in US drilling activity took a break,” said Stephen Brennock, an analyst at PVM Oil Associates Ltd. in London. It
“suggests some producers are starting to feel the pinch from the recent slide in prices.”
West Texas Intermediate for August delivery fell 4 cents to $46 a barrel on the New York Mercantile Exchange at 10:59 a.m. in London. Total volume traded was about 8 percent below the 100-day average. The contract gained $1.11 to $46.04 on Friday to the highest since June 13.
Brent for September settlement was 11 cents lower at $48.66 a barrel on the London-based ICE Futures Europe exchange. Front-month prices gained 5.2 percent last
week. The global benchmark crude traded at a premium of $2.41 to September WTI.
US drillers reduced the number of rigs by 2 to 756, snapping the longest stretch of gains in at least three decades, according to Baker Hughes. The count had climbed to the highest level since April 2015. Libya’s output has rebounded from only 690,000 barrels a day at the start of the year, with Sharara, the country’s largest oil field, resuming production last month. State National Oil Corp. Chairman Mustafa Sanalla said in April he wanted to boost national output to 1.1 million barrels a day by August.
Hedge fund wagers on lower prices in the week through June 27 increased at a slower pace than the two previous weeks, according to data from the Commodity Futures Trading Commission. A Saudi-led coalition that has cut air, sea and land links with Qatar over accusations the country is supporting terrorism agreed to a two-day extension of its deadline for Qatar to meet its demands, the state-run Saudi Press Agency reported. OPEC’s crude output rose 210,000 barrels a day in June to 32.54 million as Libya, Angola and Saudi Arabia pumped more, said JBC Energy. Goldman Sachs Group Inc. is reviewing its commodities business after a slump in the first half of the year, according to people with knowledge of the matter.