Oil prices dip in Asia as US rig count jumps
AP File Photo
SINGAPORE, Singapore—Oil prices eased in Asia Monday as an increase in US drilling activity and a strong dollar reversed gains from last week’s better-than-forecast US jobs report.
The commodity eked out modest gains Friday after data showed the world’s top economy created 287,000 jobs were added in June following a dismal rise in May.
However, the gains—which were small compared to a near five percent drop the day before—were wiped out Monday as the number of active US drilling rigs, a barometer of future output, rose by 10 to a 12-week high of 351 last week, the fifth gain in six weeks.
At about 0400 GMT, US benchmark West Texas Intermediate was down 39 cents, or 0.86 percent, at $45.02 while Brent fell 37 cents, or 0.79 percent, to $46.39.
“When those rig numbers are up, we will see weakness in the oil price because it will bring on new supply,” David Lennox, an analyst at Fat Prophets in Sydney told Bloomberg News.
“Anything where it shows that supply is potentially able to come back on-stream will cause constant problems.”
A strong dollar, which got a boost from the US employment numbers, added downward pressure on crude. A strong greenback makes dollar-priced commodities like oil more expensive for those using other currencies.
Oil has seen choppy trading along with world equity markets since Britain voted to leave the European Union on June 23.
Prices have recovered since hitting multi-year lows below $30 a barrel, but are still a long way off from more than $100 seen in mid-2014.
RELATED STORIES
Oil jumps as US crude inventories fall
Oil prices drop as IEA warns of ‘enormous’ stockpiles
