Increased US rig count, China industrial slowdown weakens oil price
Monday dealings in global oil market have shown that oil prices fell by 1 percent after U.S. companies’ added rigs for the first time this year, a signal that crude output may rise further, and China, the world’s second-largest oil user, reported additional signs of an economic slowdown. U.S. crude oil futures were at $53.13 per barrel at 0543 GMT, down 56 cents, or 1 percent, from their last settlement. International Brent crude oil futures were at $61.03 a barrel, down 61 cents, or 1 percent.
High U.S. crude oil production, which rose to a record 11.9 million barrels per day (bpd) late last year, has been weighing on oil markets, traders said. In a sign that output could rise further, U.S. energy firms last week raised the number of rigs looking for new oil for the first time in 2019 to 862, an additional 10 rigs, Baker Hughes energy services firm said in its weekly report on Friday.
Beyond oil supply, a key question for this year will be demand growth. Oil consumption has been increasing steadily, likely averaging above 100 million bpd for the first time ever in 2019, driven largely by a boom in China.