Crude oil futures mixed on rising US rig count, lower OPEC supply

Crude oil futures were mixed during mid-morning trade in Asia Monday, with a rising US oil rig count putting pressure on the NYMEX crude contract, while a decline in OPEC output lent support to Brent prices.

At 10:30 amSingapore time (0230 GMT), the August ICE Brent crude futures inched up 3 cents/b (0.04%) from Friday`s settle to $76.49/b, while the NYMEX July light sweet crude contract slid 4 cents/b (0.06%) to $65.70/b.

According to data released by Baker Hughes on Friday, US oil rig counts inched up by one to 862 for the week ended June 8.

“WTI declined as investors digested the sustained climb in oil rigs for the third consecutive week into June 8,” OCBC Commodity economist Barnabas Gan said.

The Permian oil rig count rose by three for the week ended June 8 to 479. The basin, sited in West Texas and southeastern New Mexico, is the US` most active oil and gas drilling area.

Last week`s Permian oil rig count has risen 13 of the last 18 weeks and is at its highest level since mid-2015.

The data comes at a time while US crude production is at record high of 10.8 million b/d as of June 1, latest figures from the US Energy Information Administration showed.

Meanwhile, some support came from lower OPEC crude production, which slid for the fourth straight month in May to its lowest in over a year, latest S&P Global Platts survey showed.

OPEC production in May fell 100,000 b/d from the previous month to 31.9 million b/d, according to the survey as outages in Nigeria and Venezuela more than offset higher output from Saudi Arabia, Iraq and Algeria.

OPEC output was last lower in April 2017 at 31.85 million b/d, the last month before West African producer Equatorial Guinea became its newest member.

OPEC and its allies are set to convene at Vienna on June 22 to take a call on whether to continue with their supply cut agreement or to increase production.

With different producer countries having different views regarding the decision to increase output, prices are expected to remain volatile ahead of the meeting, analysts said.

Meanwhile, market participants will be also be closely watching out for the meeting between US President Donald Trump and North Korean leader Kim Jong Un in Singapore on June 12 — a historical and landmark event that could potentially lead to the easing of international sanctions on North Korea, allowing Pyongyang to trade minerals and fuel in the international energy markets.

“Commodity prices will be largely rangebound as market watchers look on at the US-Pyongyang summit event tomorrow, ” said Gan.

As of 0230 GMT, the US Dollar Index was down 0.14% at 93.425.

This article provided by NewsEdge.