Oil extends losses as US rigs drilling for crude rise 2nd week

[TOKYO] Crude fell a third day after the number of rigs drilling for oil in the US rose for a second week.

Futures fell as much as one per cent in New York after dropping 4.2 per cent in the previous two sessions. Rigs targeting crude in the US rose by three to 328 last week, capping the first two-week gain since August, Baker Hughes Inc said Friday.

Iran is seeking to boost output by 600,000 to 700,000 barrels a day over five years from fields in an area west of the Karoun River along the Iraqi border, oil minister Bijan Namdar Zanganeh said.

Oil has surged about 85 per cent from a 12-year low in February as the global glut is trimmed by disruptions and a slide in US output, which is under pressure from the Organization of Petroleum Exporting Countries' policy of pumping without limits.

West Texas Intermediate for July delivery fell as much 49 US cents to US$48.58 a barrel on the New York Mercantile Exchange and was at US$48.66 at 7:27 am Tokyo time.

Total volume traded was 29 per cent below the 100-day average. The contract slipped US$1.49 to settle at US$49.07 on Friday.

Brent for August settlement dropped as much as 42 US cents to US$50.12 on the London-based ICE Futures Europe exchange. Prices decreased US$1.41 to close at US$50.54 on Friday. The global benchmark crude was trading at a 87-cent premium to WTI for August delivery.

BLOOMBERG