Oil up on widespread OPEC deal compliance, U.S. rig count rises

Fri Feb 10, 2017 4:09pm EST
 
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By Devika Krishna Kumar

NEW YORK (Reuters) - Oil prices rose on Friday after reports that OPEC members delivered more than 90 percent of the output cuts they pledged in a landmark deal that took effect in January.

Supply from the 11 members of the Organization of the Petroleum Exporting Countries with production targets under the deal fell to 29.92 million barrels per day, according to the average assessments of the six secondary sources OPEC uses to monitor output, or 92 percent compliance.

The International Energy Agency (IEA) - one of OPEC's six sources - said the cuts in January equated to 90 percent of the agreed reductions in output, far higher than the initial 60 percent compliance with a 2009 OPEC deal.

"Some producers, notably Saudi Arabia, (are) appearing to cut by more than required," the agency said in a report.

Global benchmark Brent crude LCOc1 settled up $1.07, or 1.9 percent, at $56.70 a barrel. It touched a session high of $56.88.

U.S. West Texas Intermediate (WTI) crude futures CLc1 settled up 86 cents, or 1.6 percent, at $53.86 a barrel.

Another increase in U.S. oil rigs limited gains in the afternoon. Drillers added eight oil rigs in the week to Feb. 10, bringing the total count up to 591, the most since October 2015, energy services firm Baker Hughes Inc (BHI.N: Quote) said.

"From a psychological viewpoint, a big number to close above would be $54, and the rig count probably made that a little less likely," said Phil Flynn, analyst at Price Futures Group in Chicago, speaking about U.S. crude.   Continued...

 
FILE PHOTO - A fuel nozzle is pictured at petrol station in Moenchengladbach March 10, 2012.  REUTERS/Ina Fassbender