Oil trades near $50 amid gains in OPEC supply

Bloomberg

Oil traded near $50 a barrel in New York as U.S. producers increased drilling and OPEC nations added supply, threatening to compound a global surplus.
Futures were little changed after slipping 0.2 percent Friday. Output from OPEC member Libya expanded to 560,000 barrels a day, according to National Oil Corp., up from 540,000 last week, while Iran repeated plans to boost output to 4 million barrels a day. Rigs targeting crude rose for a seventh week to the highest since February, Baker Hughes Inc. said on its website. That followed the first gain in U.S. inventories in six weeks.
Oil has fluctuated near $50 a barrel amid speculation over the
ability of the Organization of Petroleum Exporting Countries to implement an agreement to reduce supply. An OPEC committee will meet later this month to try and resolve differences over how much individual members should pump.
“The U.S. rig count continues to grow,” said Hamza Khan, an analyst at ING Bank NV in Amsterdam. “The continual increase in the number of rigs does suggest that the upside in crude prices should be capped, with the threat of U.S. oil output returning.”
West Texas Intermediate for November delivery fell as much as 41 cents to $49.94 a barrel on the New York Mercantile Exchange and was at $50.22 at 11:25 a.m. in London. The contract dropped 9 cents to $50.35 on Friday. Total volume traded was 10 percent below the 100-day average.
Brent for December settlement was 4 cents lower at $51.91 a barrel on the London-based ICE Futures Europe exchange. The contract lost 0.2 percent to close at $51.95 on Friday. The global benchmark crude traded at a premium of $1.28 to WTI for December. U.S. producers added four rigs to 432 last week, Baker Hughes said Friday. Explorers have now added more than 100 rigs since a steady expansion began in June. The nation’s crude inventories rose to 474 million barrels through Oct. 7, according to data from the Energy Information Administration. That’s the highest for that time of year since the EIA began publishing weekly data in 1982.
Iran is seeking to pump 4 million barrels a day within two weeks, Ali Kardor, the managing director of National Iranian Oil Co., said at an energy conference. That compares with 3.89 million barrels a day now. India’s billionaire Ruia brothers agreed to sell a 98 percent stake in their refinery unit to Russia’s Rosneft PJSC and a consortium of Trafigura Group and United Capital Partners for about $13 billion.