Oil slips to 3-month low as US rig count rises

Crude oil extended losses from last week on Monday, dropping to a three-month low after US rig count rose for the eighth consecutive week.

International benchmark Brent crude was down 0.8 percent at $50.98 per barrel (bbl), ahead of Dubai trading hours. WTI crude fell nearly 1 percent to $48.03/bbl.

US drillers added 12 rigs in the last week, taking the total count to 768. Oil rigs were up 8 to 617, latest weekly data from Baker Hughes revealed.

The US rig count is up 288 rigs from last year’s count of 480, the oilfield services provider said.

“Investors are finally taking record of US oil stockpiles seriously,” Gary Dugan, chief investment officer at Emirates NBD, said in a note.

Further weakness in prices could be expected if Organization of Petroleum Exporting Countries (OPEC) chose not to extend production cuts beyond the stipulated six months, he added.

Brent futures dropped more than 8 percent over the last week, closing on Friday at $51.37/bbl.  WTI gave up over 9 percent on the week.

In November, OPEC and non-member exporters including Russia reached an agreement to reduce production by almost 1.8 million barrels per day in the first half of 2017.

According to International Energy Agency, the members have kept to the terms of the deal, with OPEC reaching a 90 percent compliance rate in January.

Crude inventories in the US, meanwhile, have been on the rise. The stockpiles jumped 8.2 million barrels in the week to March 8, Energy Information Administration data showed.

Write to Nadeshda Zareen at nadeshda.zareen@argaamplus.com