Oil steady after third weekly loss as US shale keeps drilling

Bloomberg

Oil steadied after a third weekly loss on speculation that sustained drilling by US producers will blunt efforts by OPEC and Russia to re-balance an oversupplied crude market.
Futures were little changed in New York after sliding 3.8 percent last week. Inventories are declining and reductions will accelerate in the next three to four months, Saudi Arabia’s Energy Minister Khalid Al-Falih said at a briefing in Kazakhstan with his Russian counterpart, Alexander Novak. Russia is committed to doing everything it can to balance the market, Novak said.
Oil is trading below $50 a barrel amid speculation increased US supplies will counter production curbs by the Organization of Petroleum Exporting Countries and its allies, including non-member Russia. American drillers targeting crude added rigs for the 21st straight week, the longest run of gains in three decades, according to data from Baker Hughes Inc.
“Global stockpiles are coming down steadily, it’s just that it has started from a very high level,” said Gordon Kwan, a Hong
Kong-based analyst at Nomura Holdings Inc.
West Texas Intermediate for July delivery rose 2 cents to $45.85 a barrel on the New York Mercantile Exchange as of 8:49 a.m. in London. Total volume traded was about 8 percent above the 100-day average. Prices increased 19 cents to close at $45.83 on Friday, trimming the weekly decline to 3.8 percent.
Brent for August settlement climbed 14 cents to $48.29 a barrel on the London-based ICE Futures Europe exchange. Prices lost 3.6 percent last week. The global benchmark crude traded at a premium of $2.12 to August WTI.
Global crude inventories will settle at their five-year historical average — OPEC’s target — before the end of the year, Al-Falih said in Astana. Still Saudi Arabia, the group’s biggest producer, may modify its policy if output cuts don’t have the desired effect, he said.
US drillers increased the rig count by eight to 741, the highest level since April 2015, according to Baker Hughes. Qatar, the focus of a diplomatic dispute with Saudi Arabia, is committed to production cuts under the OPEC-led agreement, according to Qatari Energy Minister Mohammed Al Sada.