Global oil prices extended declines Friday after data showing a rise in U.S. production more than offset falling crude stockpiles and ongoing efforts by OPEC members to trim output.
West Texas Intermediate crude futures for August delivery were seen 2.6% lower from Thursday's close at $44.32 while Brent contracts for September, the global benchmark for pricing, fell 2.5% to $46.91 by 10:15 am London time.
The moves follow data from the Energy Information Administration late Wednesday which showed that U.S. crude inventories fell by 6.3 million barrels in the week ending June 30, more than tripled what analysts had expected, while gasoline stocks declined by 3.7 million barrels to just over 237 million. U.S. production rates, however, rose 1%, or 88,000 barrels to 9.34 million barrels per day, the EIA said, an increase of more than 10% from the same period last year.
Investors will now likely switch focus to the Baker Hughes rig count of production facilities around the U.S. Gulf region, which last week showed the first reduction in drilling additions since January, for the next signal on price direction.
There are 756 rigs in operation at present, according to the Houston-based oil services firm's benchmark count, more than double the amount on line during the same period last year. And while the pace of additions has slowed, the count has risen for 52 of the past 57 weeks, providing a huge boost for U.S. production rates and more than offsetting OPEC's agreed out cuts which, along with non-members such as Russia, will take 1.8 million barrels of oil per day from the market until the end of March.
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