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Oil prices edge up as US rig count falls
[NEW YORK] Oil prices finished a bit higher on Wednesday after a US inventory report showed increased petroleum supply, but a separate report showed fewer drilling rigs in service.
US benchmark West Texas Intermediate for January delivery advanced 17 cents to US$43.04 a barrel on the New York Mercantile Exchange.
European benchmark Brent oil for January delivery added five cents at US$46.17 a barrel in London.
Data from the US Department of Energy showed that US oil supplies rose by 1.0 million barrels for the week ending November 20.
That was followed by a report from Baker Hughes showing a decline of nine oil rigs in the US to 555 for the week ending November 25.
Bart Melek, head of commodity strategy at TD Securities, said the US oil inventory report was "negative" as far as suggesting a worsening supply glut, "but not super-negative" compared with expectations.
Mr Melek said the market would stay skeptical of the Baker Hughes data until there is greater evidence that a lower rig count results in less output.
US oil production fell by just 17,000 barrels a day last week, less than 0.2 per cent.
"We've seen oil production isn't responding anywhere near as quick as what's suggested by the oil rigs," he said. "So our view continues to be we're going to test the lows of recent weeks." Traders were looking ahead to next week's Opec meeting in Vienna for signs on whether the oil-producing cartel would slash high production levels.
Tim Evans, analyst at Citi Futures, said there has been talk from some members of the Organisation of the Petroleum Exporting Countries that wish to cut output, but not from Saudi Arabia and other influential members, "suggesting they will insist on continuing the fight for market share."