The oil price turned positive in early Monday afternoon trading, reversing an earlier fall. Oil production related news was mixed, with likely rising US production countering geopolitically-output related news elsewhere.
By 1400 BST, the price of Brent crude was $63.63, up 0.36% from the open. The price of US WTI crude oil, meanwhile, gained 0.17% to $57.46.
US oil rig count up
Data from Baker Hughes shows the number of US oil rigs, rose by 2 in the week ended December 8, to hit 751. That’s the third straight week in which that measure has risen and suggests US shale oil production will continue to rise.
The number of rigs now in operation means the US is capable of producing around 9.71 million barrels per day. That’s the highest level since the 1970s and puts the country’s output abilities close to Russia and Saudi Arabia.
Meanwhile, Venezuelan exports of crude oil to the US fell to the lowest level since 2003, according to Reuters data. A combination of US-imposed sanctions and low production levels combined to limit the country’s export activity during November.
Output tightens elsewhere
While the US ramps up oil production, developments elsewhere among oil producing countries is weighing on output.
The beginnings of a humanitarian crisis in Yemen could derail the country’s ability to once again increase oil production there. Throughout 2017, an average of 40,000 barrels per day of crude oil has been produced. Fears are that this relatively low level, could decline further.
Elsewhere, the threat of a strike by one of Nigeria’s biggest oil worker unions, continues to weigh on investor sentiment.
And, even though the OPEC and non-OPEC countries who have extended the agreement to cap oil output, said they could increase that output, it would still take time.
Indeed, OPEC members over the weekend said it was likely talks would begin in June, on how to phase out the output cap which is currently in place until the end of 2018.