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Oil halts gains as US adds rigs while Iran seeks export boost

Monday, October 3, 2016 - 07:02

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Oil halted three days of gains since Opec agreed last week to cut output as US drillers added more rigs and Iran signalled it's seeking to raise exports.

[TOKYO] Oil halted three days of gains since Opec agreed last week to cut output as US drillers added more rigs and Iran signalled it's seeking to raise exports.

Futures fell as much as 0.8 per cent in New York, paring the 8 per cent advance following the agreement by the Organization of Petroleum Exporting Countries Wednesday to trim production for the first time in eight years.

Rigs targeting crude in the US rose a fifth consecutive week, up 7 to 425, Baker Hughes Inc, said on its website Friday. Iran wants to increase exports to 2.35 million barrels a day in the coming months, state news agency IRNA reported.

Oil capped the biggest monthly gain since April after the Opec agreement was announced, which caught the market by surprise after prior signals from Saudi Arabia and Iran that an accord was unlikely.

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While quotas will be decided at Opec's official meeting in November, Nigeria, Iran and Libya have said they are exempt from an agreement and Iraq has said it doesn't accept Opec's estimates of its production levels.

West Texas Intermediate for November delivery fell as much as 39 US cents to US$47.85 a barrel on the New York Mercantile Exchange and was at US$47.85 as of 7:40am Tokyo time.

The contract rose 41 US cents to settle at US$48.24 a barrel on Friday. Total volume traded was about 78 per cent below the 100-day average.

Brent for December settlement lost as much as 36 US cents, or 0.7 per cent, to US$49.83 a barrel on the London-based ICE Futures Europe exchange.

The November contract fell 18 US cents to expire at US$49.06 a barrel on Friday. The global benchmark traded at a US$1.42 premium to December WTI.

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