Oil futures edge lower as US rig count rises

Oil futures retreated on Monday, following Baker Hughes data that showed an increase in US rig count by 14 for the week ending March 17.

Brent crude futures prices were down 0.7 percent at $51.39 per barrel (bbl) and WTI crude futures fell 1 percent to $48.29/bbl, in early Dubai trading hours.

US drillers added 14 oil rigs in the week to March 17, taking the total to 631, energy services firm Baker Hughes said on Friday.

Rising US supply continues to weigh on oil prices, offsetting the positive impact of OPEC indicating a possibility of extending its output cut deal beyond the six-month timeframe.

“Sentiment in the oil market remains fragile at this stage,” Ole Hansen, head of commodity strategy at Saxo Bank, said in a note.

“Much depends on the positioning in the market. The speculative longs which peaked above 1 billion barrels in February are likely to have seen a sharp reduction, while short-sellers have emerged from hibernation,” Hansen said.

“A reduction in the number of long positions relative to the number of shorts will help stabilize the market.”