Oil trades below US$33 as US explorers idle more rigs amid glut

[HONG KONG] Oil traded below US$33 a barrel as US drillers cut the number of active rigs to the lowest level in more than six years amid a global glut.

Futures slipped as much as 0.8 per cent in New York after posting the biggest weekly gain since August on Friday. Rigs targeting oil fell by 13 to 400, the lowest since Dec 2009, according to Baker Hughes Inc.

That is the 10th week of declines. Eni SpA, Italy's biggest producer, on Friday reported a fourth-quarter loss, missing analysts' expectations as the slide in crude prices deepened.

Oil is down 12 per cent this year on speculation a worldwide surplus will be prolonged amid the outlook for increased exports from Iran and US stockpiles that are at the highest level in more than eight decades.

A proposal to freeze output by Saudi Arabia and Russia is achievable and prices my rise to as high as US$50 a barrel by the end of the year, Nigerian minister of state for petroleum resources Emmanuel Ibe Kachikwu told CNBC.

West Texas Intermediate for April delivery fell as much as 25 US cents to US$32.53 a barrel on the New York Mercantile Exchange and was at US$32.59 at 7:56 am Hong Kong time.

The contract lost 29 US cents to close at US$32.78 on Friday. Total volume traded was about 62 per cent below the 100-day average. Prices rose 11 per cent last week.

Brent for April settlement, which expires Monday, was 18 US cents lower at US$34.92 a barrel on the London-based ICE Futures Europe exchange.

The contract dropped 19 US cents to close at US$35.10 on Friday.

The European benchmark crude was at a premium of US$2.34 to WTI. The more-active May contract was down 19 US cents at US$35.25.

BLOOMBERG