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Oil up on expectation of Saudi production restraint, lower US rig count
[SINGAPORE] Oil prices edged up on Monday, halting a 2 per cent slide from Friday, on expectations that Saudi Arabia would continue to restrain its output in order to support prices, and as the amount of rigs drilling for new oil in the United States dipped.
Oil ports, producers and refiners in Louisiana, Mississippi and Alabama, which shut facilities ahead of Hurricane Nate, were planning to reopen on Monday as the storm moved inland, away from most energy infrastructure on the US Gulf Coast.
US West Texas Intermediate (WTI) front-month crude futures were trading at US$49.44 per barrel at 0015 GMT, up 15 cents, or 0.3 per cent, from their last close.
Brent crude futures, the international benchmark for oil prices, were up 8 cents, or 0.14 per cent, at US$55.70 a barrel.
Oil tumbled by around 2 per cent on Friday, with WTI dipping back below US$50 per barrel, as concerns of overproduction re-surfaced.
But analysts said on Monday that a Saudi Arabian commitment to support the market by restraining output would prevent crude from falling further.
"We remain fairly confident that the Saudi's will look to continue to support the oil market, especially until the sale of Aramco," said Shane Channel, equity and derivatives adviser at ASR Wealth Advisers.
State-owned oil giant Saudi Aramco is planning to float around 5 per cent of the firm in an initial public offering (IPO) next year.
A reported cut in the number of US oil rigs drilling for new production provided some price support.
The oil rig count fell by two to 748 in the week to Oct 6, General Electric Co's Baker Hughes energy services firm said in its closely followed report on Friday.