The general U.S. oil drilling trend shows that it is set to become the world’s no.1 oil producer.
On Monday, two factors contributed in the rise of oil prices. The first was the drop in production of U.S. rigs drilling and the second was the U.S. economy continuing to create jobs which the oil industry hopes will spur more demand for fuel.
As of 0407 GMT, U.S. West Texas Intermediate (WTI) crude futures CLc1 was seen trading at $62.10 a barrel, up by 0.1%, or by 6 cents.
Brent crude futures LCOc1 was also seen trading at $65.58 per barrel, up by 0.1%, or by 9 cents from their previous close.
“A falling rig count and the strong employment data may have helped support prices,” said William O’Loughlin, an investment analyst at Rivkin Securities.
On Friday, the U.S. Labor Department released its figures which showed that the U.S. economy was chugging along nicely and was generating its biggest number in terms of jobs growth in more than 1-1/2 years in February, with non-farm payrolls jumping by 313,000 jobs in February 2018.
According to energy services firm, Baker Hughes, U.S. energy companies have cut their rig count for the first time in nearly two months. This is an early indicator that oil production remains much higher than the levels a year ago when only 617 rigs were active.
Many analysts expect U.S. crude oil production C-OUT-T-EIA, which has risen by over a fifth since mid-2016, to 10.37 million barrels per day (bpd), to rise even higher.
This is more than the top exporter of Saudi Arabia and almost as much as Russia, which pumps out nearly 11 million bpd.
As per Phillip Futures, a Singapore-based brokerage firm, the oil market “will focus on OPEC and IEA (monthly) reports this week for a sensing on global demand/supply levels for crude oil” and that “items in focus will include OECD commercial stock levels, revision in global demand and supply for crude oil and OPEC’s compliance on production levels”.