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Oil prices extend rise in Asian trade
[SINGAPORE] Oil prices advanced further in Asia on Monday as dealers cheered signs of a dip in North American crude production, while a robust US jobs report also provided support, analysts said.
US benchmark West Texas Intermediate for March delivery rose 65 US cents to US$52.34 while Brent crude for March rose 35 US cents to US$58.15 in mid-morning trade.
Last week saw WTI surge 13.6 per cent and Brent add 9.4 per cent, their best weekly gains since February 2011.
Nicholas Teo, market analyst at CMC Markets in Singapore, said the gains were "motivated by supply-side influences" in the United States.
A survey by US oil services firm Baker Hughes Inc released Friday showed the number of rigs drilling for oil in the United States fell 83 to 1,140 in the week to February 6. The dip followed a cut of 94 rigs in the previous week.
Bloomberg News reported that the rig count was standing at its lowest level since December 2011.
The drop, coupled with announcements of deep cuts in capital spending by major oil companies including BP and BG Group, suggests there will be tighter supplies in the future.
Oil prices have plunged by about 50 per cent from their June peaks, largely owing to a surge in global reserves boosted by robust US shale production.
Teo said a surprisingly robust jobs report in the US was also supporting prices as it means stronger demand.
The Labor Department on Friday reported the the world's biggest economy added 257,000 jobs in January and revised upward already healthy growth in the prior two months.
The unemployment rate edged up to 5.7 per cent from 5.6 per cent, but that was in part because more people were actively seeking jobs.
"The US economy seems to be singing a different tune to the symphony of deflationary calls played by most other major economies in recent weeks," Teo said.