Oil held gains above US$65 a barrel as trading resumed following the Christmas holiday and after US explorers refrained from adding rigs for a second week.
Brent for February settlement added 2 cents to $65.27 a barrel on the London-based ICE Futures Europe exchange. Prices gained 35 cents, or 0.5 per cent, to $65.25 Friday. The global benchmark crude traded at a premium of $6.73 to West Texas Intermediate.
WTI for February delivery was at $58.54 a barrel on the New York Mercantile Exchange, up 7 cents, at 2:23pm in Seoul. Total volume traded was about 53 per cent below the 100-day average. The contract on Friday added 11 cents, or 0.2 per cent, to $58.47.
Futures were little changed in New York after gaining 2 per cent last week. The number of US rigs targeting oil remained unchanged at 747, Baker Hughes data showed Friday. A repair of the North Sea’s Forties Pipeline System is complete and pressure testing has started, the operator Ineos Group said Monday. The halt of the line earlier this month sent prices surging.
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“It’s a bit too early to say whether U.S. rigs will continue to decline as we can’t ignore the fact that it’s winter and some seasonal factors could be stalling drilling activity,” said Will Yun, a commodities analyst at Hyundai Futures. “The shutdown of the Forties pipeline has kept prices higher and it will support oil’s bull run until at least the end of this year.”
Despite a rally in crude prices, this year’s drilling ramp-up has slowed since peaking in August as investors in the oil industry are pushing for returns over growth, a large backlog of drilled wells still needs to be fracked and technology increasingly allows producers to tap more from each hole.