Investing.com – Crude oil prices held steady to lower in early Asia on Friday with thye market looking ahead to U.S. data on working rigs as producers weigh the cost of pumping more oil into an oversupplied market.
On the New York Mercantile Exchange, WTI crude for September delivery fell 0.03% to $48.51 a barrel.
Investors await the release of Friday's weekly U.S. oil rig count from oil services firm Baker Hughes (NYSE:) for further indications on the supply-demand balance nationwide. Last week, the firm said the total number of U.S. oil rigs increased by 21 to 659. Earlier this summer, the total increased on two consecutive weeks, a rarity considering that the count previously decreased for a period of 29 straight weeks. Last fall, U.S. oil rigs peaked at a level above 1,500.
Energy analysts, however, are placing less stock in the rig count in comparison with recent years, as U.S. shale producers find creative ways to drill efficiently while removing less effective rigs.
Overnight, WTI crude futures fell slightly on Thursday reversing territory following a late sell-off, as energy traders reacted to the long-term ramifications of an unexpected supply draw and indications that Saudi Arabia could curtail production one session earlier.
On the Intercontinental Exchange (ICE), for September delivery wavered in a tight range between $53.06 and $54.37 before settling at $53.42, up 0.05 or 0.12%. Over the last thirty days, the value of brent futures has also fallen sharply – declining by approximately 15%.
On Wednesday, the U.S. Energy Information Administration (EIA) said in its Weekly Petroleum Status report on Wednesday that stockpiles fell by 4.203 million barrels for the week ending on July 24, below expectations for a 1.88 million draw. U.S. crude inventories are now at 459.69 million barrels, near the highest levels seen in at least 80 years.
Also on Wednesday, the Wall Street Journal reported that Saudi Arabia could slash crude output by 200,000 to 300,000 barrels a day, to roughly 10.3 million bpd as early as September. In June, the kingdom produced more than 10.6 million barrels a day, amounting to its highest level on record. Some analysts predict that Saudi output could exceed 11 million bpd before the end of the summer.
Any supply draw is viewed as bullish for crude prices amid a glut of oversupply in global energy markets.
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