Oil Prices Turn Lower as Rig Count Rises

23 Dec 2015 | Author: | No comments yet »

Oil Prices Turn Lower as Rig Count Rises.

The number of U.S. oil-drilling rigs, which is viewed as a proxy for activity in the oil industry, has fallen sharply since oil prices started falling last year. Price had rebounded earlier in the session, boosted by a falling dollar as commodity traders continue keeping a close eye on currencies after the U.S. The Wall Street Journal Dollar Index is down 0.3% Friday. “Everybody’s going to watch the dollar,” said Dean Hazelcorn, trader at the brokerage Coquest Inc. in Dallas. “It’s like a fresh scrape; it’s a little bit sensitive for the moment.” Friday’s retreat puts oil back on pace for a third-straight losing week.

Many analysts forecast more trouble ahead as heavyweight oil producers, including those in OPEC and Russia, continue to pump crude at a high pace in a bid to defend their market share. It is “apparent” that OPEC output will stay at 32 million barrels a day, and then grow by 300,000 to 500,000 when Iran can export again, Jefferies analyst Jason Gammel said.

Other than technical traders and strong gasoline demand, “we see no significant supportive items on the horizon capable of forcing a bottom into WTI,” Jim Ritterbusch, president of energy-advisory firm Ritterbusch & Associates, said in a note. In the U.S., data provider Genscape Inc. said Thursday that stockpiles at Cushing, Okla., the delivery point for the WTI contract, rose by nearly 1.4 million barrels in the week that ended Tuesday. Energy Department reported a much larger-than-expected 4.8-million-barrel increase in U.S. crude stockpiles last week. “The inventory overhang leads us to believe that the price recovery will be protracted and it could take two years to liquidate enough volume to bring storage back to the [long-term] average,” Mr.

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