Luke Sharrett/Bloomberg News
Oil traded at its lowest in more than a week in New York on signs U.S. production is continuing to recover, undermining OPEC’s efforts to clear a global glut.
Futures dropped 0.7% in New York after falling 1% April 17. Crude output at major U.S. shale plays is forecast to climb to 5.2 million barrels a day in May, the highest since 2015, according to the Energy Information Administration’s monthly Drilling Productivity report. Drillers in the nation have added rigs for the past 13 weeks, data from Baker Hughes Inc. show.
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Oil had rallied to more than $53 a barrel after some producing countries voiced support for prolonging a six-month supply-cut deal by the Organization of Petroleum Exporting Countries and its allies.
While U.S. shale output could come “roaring back” amid higher prices, stockpiles will start to drop significantly as the curbs by OPEC and its partners continue, Citigroup Inc. said in a report.
“OPEC compliance against rising U.S. production” remains the main theme in the market, said Tamas Varga, an analyst at PVM Oil Associates in London. “OPEC will need to take action at the next meeting in order to provide some kind of oil-price support.”
West Texas Intermediate for May delivery was at $52.26 a barrel on the New York Mercantile Exchange, down 39 cents, at 12:58 p.m. London time. That’s the lowest since April 10. Total volume traded was in line with the 100-day average. Prices lost 53 cents to $52.65 on April 17, the lowest close since April 7.
| By Grant Smith Bloomberg News |
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