Oil rises on U.S. production dips, Middle East tensions

Tue Apr 14, 2015 5:47pm EDT
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By Robert Gibbons

NEW YORK (Reuters) - Crude oil futures rose on Tuesday on signs of falling U.S. oil production, weakness in the dollar and tensions in the Middle East, particularly Yemen.

North Dakota's February oil production fell 15,000 barrels per day (bpd) versus January, data showed on Tuesday, although the number of producing wells hit a record high.

"Today's (U.S.) led crude spike was spurred primarily by supportive supply side headlines suggesting a quicker production response to rig declines than previously anticipated," said Jim Ritterbusch, president at Ritterbusch & Associates.

North Dakota's report followed the U.S. Energy Information Administration's (EIA) Monday report forecasting U.S. shale production will fall by 45,000 bpd to 4.98 million bpd in May, which would be the first monthly decline in four years.

Shale production helped boost U.S. output by more than 4 million bpd since 2010, a factor in oil's stunning price retreat since June.

Ahead of Wednesday's May contract expiration, Brent rose 50 cents to settle at $58.43 a barrel, just above its $58.40 100-day moving average. Brent also was above that average intraday Monday.

U.S. May crude rose $1.38 to settle at $53.29, surging above its 100-day moving average of $52.96.

The moves above those averages, closely watched by market technicians, were the first since July 20014.   Continued...

Pumpjacks taken out of production temporarily stand idle at a Hess site while new wells are fracked near Williston, North Dakota November 12, 2014.  REUTERS/Andrew Cullen