Crude near US$49 as US oil rigs rise for second time this year

[TOKYO] Crude traded near US$49 a barrel after the number of rigs drilling for oil in the US rose for only the second time this year.

Futures in New York rose as much as 0.7 per cent. Rigs targeting crude in the US rose by 9 to 325 last week, Baker Hughes Inc said Friday. Members of the Organization of Petroleum Exporting Countries rejected a proposal to adopt a new production ceiling last week, with outgoing Secretary-General Abdalla El-Badri saying that it's hard to find a target when Iranian supply is rising and significant Libyan volumes are halted.

Oil has surged about 85 per cent in New York from a 12-year low earlier this year amid supply disruptions and signs output from the US to China slid under pressure from Opec's policy of sustaining production amid a glut.

The oil surplus is contracting "faster than expected", as growing global demand could push prices to US$60 a barrel this year, according to Ali Majed Mansoori, chairman of Abu Dhabi Dept of Economic Development.

West Texas Intermediate for July delivery rose as much 34 US cents to US$48.96 a barrel on the New York Mercantile Exchange and was at US$48.89 at 7:21 am Tokyo time.

Total volume traded was 91 per cent below the 100-day average. Prices fell 55 US cents to settle at US$48.62 on Friday, resulting in the first weekly loss in a month.

Brent for August settlement added 26 US cents, or 0.5 per cent, to US$49.90 on the London-based ICE Futures Europe exchange Monday. Prices slipped 40 US cents to close at US$49.64 on Friday. The global benchmark crude was trading at a 52-cent premium to WTI for August delivery.

BLOOMBERG