Investing.com - Crude prices in the U.S. trading day dipped sharply on Friday after rig count figures hit sentiment by highlighting how rapidly small producers can respond to higher prices and investors also noted weaker than expected economic growth in the last quarter of 2016
On the New York Mercantile Exchange, crude futures for March delivery fell 1.13% to $53.17 a barrel, while Brent futures on London's Intercontinental Exchange dropped 1.28% to $55,52 a barrel.
U.S. drillers added 13 rigs by the end of last week, taking the total active to 566, Baker Hughes said on Friday with the oilfield services firm now noting gains in 12 of the past 13-week period and up from 498 a year ago.
The gains come on the back of a recovery in global crude prices above $50 a barrel since late last year and into 2017 when a pact between OPEC and non-OPEC nations agreed to nearly 1.8 million barrels-per-day of supply cuts to global markets for the first six months of the year.
The Baker Hughes oil rig count plunged from a record 1,609 in October 2014 to a six-year low of 316 in May. U.S. crude collapsed from over $107 a barrel in June 2014 to near $26 in February 2016.
As well, investors took note of U.S. Bureau of Economic Analysis figures that said gross domestic product grew 1.9% in the fourth quarter of 2016, disappointing expectations for 2.2% and after a 3.5% growth rate in the three months to September. Separately, the Census Bureau said U.S. durable goods orders fell 0.4% in December, compared to expectations for a 2.6% gain. Core durable goods orders, which exclude transportation items increased by 0.5% last month, in line with expectations.
Also this week, the U.S. Energy Information Administration said on Wednesday that crude supplies rose by 2.9 million barrels last week to 488.3 million barrels, sparking concerns over the levels of global oil supplies as OPEC and non-OPEC countries have made a strong start to lowering their oil output under the first such pact in more than a decade, energy ministers said over the weekend as producers look to reduce oversupply and support prices.
If carried out as planned, the deal should reduce global supply by about 2%.