EghtesadOnline: Oil declined from the highest close in six weeks as U.S. producers increased drilling and Iran signaled it’s seeking to boost exports after OPEC members agreed to reduce output at a meeting last week.
Futures dropped as much as 1 percent in New York after advancing 8 percent during the previous three sessions. Rigs targeting crude in the U.S. rose a fifth consecutive week to the highest level since February, Baker Hughes Inc. said on its website Friday. Iran wants to increase exports to 2.35 million barrels a day in the coming months, state news agency IRNA reported. The OPEC member is currently shipping 2.2 million barrels a day, reports Bloomberg.
Oil capped the biggest monthly gain since April after the Organization of Petroleum Exporting Countries agreed to trim supply for the first time in eight years. While quotas will be decided at the group’s official meeting in November, Nigeria, Iran and Libya have said they are exempt and Iraq has said it doesn’t accept OPEC’s estimates of its production levels. Russia boosted output last month to a post-Soviet record.
“Oil will probably trade between $45 and $50 a barrel as we move into November and see what type of deal is done,” said Angus Nicholson, a market analyst in Melbourne at IG Ltd. “There are questions about how OPEC is going to police the new output limits and how they will keep members in line if they breach their production ceiling.”
West Texas Intermediate for November delivery fell as much as 46 cents to $47.78 a barrel on the New York Mercantile Exchange and was at $47.90 at 1:04 p.m. in Hong Kong. The contract rose 41 cents to $48.24 on Friday, the highest close since Aug. 19. Total volume traded was about 49 percent below the 100-day average. Prices rose 7.9 percent in September.
Brent for December settlement lost as much as 45 cents, or 0.9 percent, to $49.74 a barrel on the London-based ICE Futures Europe exchange. The November contract fell 18 cents to expire at $49.06 on Friday. The global benchmark traded at a $1.47 premium to December WTI.
U.S. drillers added seven rigs during the week ended Sept. 30, increasing the count to 425, according to Baker Hughes. The U.S. is pumping at a rate of 8.5 million barrels a day, weekly data from the Energy Information Administration shows.
- Russian output climbed to 11.11 million barrels a day in September, according to data from the Energy Ministry’s CDU-TEK unit.
- Investors increased their long position in WTI by 24,131 futures and options, or 8.1 percent, during the week ended Sept. 27, according to the Commodity Futures Trading Commission. Bets on falling prices dropped.