Monday, despite that increasing United States crude output that pondered on hopes that the market will tighten after touching a 13% drop in crude inventories since March, prices of oil remained stable. The international benchmark for oil prices, Brent crude futures traded at $52.70 a barrel which was down by 1 cent from their previous close. Meanwhile, the United States West Texas Intermediate crude futures were up by 3 cents and traded at $48.54 per barrel. This positive news came after a 3% leap in prices on Friday.
However, traders and investors are claiming that the market was somehow held back by the rising United States crude production, in which according to the United States crude supply data, the U.S. production has broken through an approximately 9.5 million barrels per day and is considered as its highest since July 2015.
In addition to this, Baker Hughes energy services firm on Friday reported that the rise in the United States crude supply may soon come to a gradual momentum, this is as energy firms cut rigs drilling for new oil for a second week in three. Driller cut five oil rigs in the week to August 18, which brings up the total count down to 763.
In relevance to this, ANZ bank claimed on Monday that the rig count suffered its biggest drop since January, and this adds to signs that the oil market is tightening. The United States commercial crude inventories have also fallen by approximately 13% from their March peaks, to 466.5 million barrels.