Oil futures ended rose on Friday, but that wasn’t enough to offset earlier losses.
Not even Brent temporarily pushing back above $US80 a barrel on worries about potential US-Saudi tensions was enough to erase the earlier weakness.
US West Texas Intermediate crude for November delivery rose 47 cents, or 0.7%, to end at $US69.12 a barrel in New York, but that still left it with a loss of around 3.1%.
The global benchmark, the December Brent crude contract finished 49 cents higher at $US79.78 a barrel, a rise of 0.6%, but still down 0.8% for the week.
Crude prices fell sharply Thursday, with the WTI notching up a two-day drop of more than 4% following a fourth straight weekly climb in crude inventories that has seen domestic supplies swell by a total of 22 million barrels over that period.
Oil prices were left unmoved by data from oil-field services firm Baker Hughes that showed the number of US drilling rigs rose by four this week to a total of 873, the highest number since March 2015 (when numbers were falling as the great global oil price slide was deepening).
That compares to 736 a year ago. Including gas rigs, there’s a total of 1,067 oil and gas rigs in service across the US at the moment.
Year-to-date, the total number of oil and gas rigs active in the United States has averaged 1,022. That’s on track this year to be the highest since 2014, which averaged 1,862 rigs. Most rigs produce both oil and gas.
US crude oil output in 2018 is expected to rise by 1.39 million barrels per day to 10.74 million bpd, according to the US Energy Information Administration (EIA) said in its Short-Term Energy Outlook.
It was over 11.2 million bpd the week before last according to the EIA (10.9 million last week but impacted by a hurricane).
The Saudis have more than offset the declines in Iranian exports so far this year, with Iranian exports down by around 700,000 barrels a day in October compared with July, while Saudi production stands near 10.7 million barrels a day.
November will see a bigger fall in Iranian exports as the Trump sanctions bite – the question now is whether the Saudis and Russia have enough spare capacity to cover the fall, and those to come in December through March next year.
