Oil prices fell about 1 percent on Friday on concerns about rising U.S. oil production and inventories.
These concerns about U.S. oil production outweighed OPEC pledges to boost compliance with output curbs.
Most noteworthy, U.S. drillers added oil rigs for a sixth consecutive week. This extended a nine-month recovery.
“The oil market remains focused on the global rebalancing act. Therefore, attention is centered on OPEC compliance and U.S. production growth.” This according to Michael Tran, director of energy strategy at RBC Capital Markets in New York. “The push-pull situation between stock draws relative to price-elastic U.S. shale remains paramount to the rebalance.”
In addition, OPEC’s record compliance with the deal has surprised many people. Furthermore, the biggest laggards, the United Arab Emirates and Iraq, have pledged to catch up with their targets. The International Energy Agency put OPEC’s average compliance at a record 90 percent in January. However, based on a Reuters average of production surveys, it presently stands at 88 percent.