Crude Oil Price Inches up to $49 as US Drilling Declines

Crude oil price on Monday edged up to about $49 per barrel after fewer drilling rigs were added in the United States, thus easing concerns that surging shale supplies will undermine the efforts by the Organisation of Petroleum Exporting Countries (OPEC) and non-OPEC to reduce the level of inventory in the oil market.

While the Brent crude, the global benchmark traded at $48.99 per barrel, the US crude traded at $46.57 per barrel.

A sharp drop in US crude inventories in the week to July 7 supported prices last week. But crude stocks in industrialised nations remained high, putting a brake on the oil price rally.

Oil prices are less than half their mid-2014 level because of a persistent glut, even after the Organization of the Petroleum Exporting Countries with Russia and other non-OPEC producers cut supplies since January.

While OPEC-led cuts have offered prices some support, rising supplies from Nigeria and Libya, two OPEC states exempt from the pact, and increasing U.S. production have weighed on the market.
Kuwait said on Friday the market was on a recovery track due to rising demand and said it was premature to cap Nigerian and Libyan output.

An OPEC and non-OPEC committee meets in Russia on July 24 to discuss the impact of the deal.

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