Oil market still under pressure despite recovery from losses

Brent Oil for investing

Oil prices got back up from losses on Monday’s early trade after falling 3 percent from the past session. However, the market is still held under pressure as U.S. oil drilling activities remains high and OPEC producers continue to deliver ample supply of oil.

International benchmark, Brent crude futures gained 0.8 percent to $47.08 per barrel, up 37 cents from their last close.

Brent crude prices are below 17 percent of their 2017 opening despite the Organization of the Petroleum Exporting Countries (OPEC) deal of cutting production since January.

The market is still focusing on the increasing U.S. production and drilling activity, according to ANZ bank.

U.S. West Texas Intermediate (WTI) crude futures climbed up 0.8 percent to $44.80 per barrel, up 37 cents.

The increase in prices was a reflection of opportunistic buying after Friday’s steep fall according to traders. However, the market still remains weak.

Last week, seven oil drilling rigs were added by U.S. energy firms, marking the 24th over 25 weeks of increases. This sums to a total of 763, marking the highest since April 2015, as said by Baker Hughes Energy Services Company.

Since mid-2016, U.S. oil production has increased to 9.34 million barrels a day, or over 10 percent in total.

Increasing U.S. oil output continues together with OPEC’s ample production despite the pledge of cutting output supply from January 2017 to March 2018.

The OPEC has exported 25.92 million barrels per day (bpd). This is 450,000 higher than last month’s production output and 1.9 million bpd higher compared to last year.

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