Investing.com – Crude oil prices settled sharply lower on Friday, posting their second straight weekly loss amid signs of ongoing U.S. expansion and uncertainty over whether OPEC would ease production limits.
The number of oil rigs operating in the US increased by 2 to 861, its highest level since March 13, 2015, according to data from energy services firm Baker Hughes, pointing to signs of an expansion in U.S. output.
The uptick in drilling activity emerges as the Energy Information Administration said Thursday U.S. oil output rose 215,000 barrels per day to a record 10.47 million barrels per day in March.
Oil prices were on the back foot for most of the week but rallied on Wednesday amid a report OPEC and its allies would stick with production cuts. Traders, however, appeared to be hedging their bullish bets on a global oil shortage as OPEC’s June 22 meeting draws closer.
CFTC COT data data last week showed speculative net long positions in WTI crude oil fell to 377,520 from 385,283 in the prior week.
OPEC in its most recent report said the production-cut agreement had helped slashed excess global oil supplies to just above the five-year average.
In November 2016, OPEC and other producers, including Russia agreed to cut output by 1.8 million barrels per day (bpd) to slash global inventories to the five year-average. The OPEC-led deal was renewed last year through 2018.
The weekly slump in crude prices comes despite data this week showing U.S. crude supplies fell by 3.6 barrels for the week ended May 25.
The drop in domestic oil supplies, however, was somewhat offset by an unexpected rise in both gasoline and distillate.
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