20 February 2015, News Wires – Brent crude oil steadied above $60 a barrel on Friday as expectations of falling US rig count numbers outweighed concerns about oversupply.
The number of rigs drilling for oil in the United States fell to its lowest since August 2011 last week. This week’s numbers, produced by oil services firm Baker Hughes, are due later on Friday.
“A further sharp decrease in the oil rig count is expected … which points to declining US oil production in the second half of the year,” said Commerzbank analyst Carsten Fritsch in a note to traders.
“This does nothing to change the considerable oversupply on the oil market in the short term, however,” he added.
US crude inventories rose 7.7 million barrels to 425.6 million barrels last week, rising for a sixth straight week to record highs, data from the Energy Information Administration (EIA) showed on Thursday.
Stockpiles of West Texas Intermediate (WTI) US crude at the Cushing oil hub in Oklahoma rose the most in six years, the EIA said.
Brent crude futures for April were unchanged at $60.21 by 1530 GMT, having hit an intraweek low of $57.80 during the previous session.
US crude for March delivery was down 52 cents at $50.64. The contract expires on Friday.
Trading was quiet in Asian hours as China and other countries were closed for the Lunar New Year holiday.
Jeffries Futures analysts said a rise in oil prices on falling rig numbers would be premature.
“Although the market could receive another pre-weekend boost from a plunge in rig counts, we will reiterate a substantial lag time of months before the rig numbers begin to force a levelling in output,” they said.
Expectations of continued oversupply were supported by rising production levels from top oil exporter Saudi Arabia.
Barclays oil analyst Miswin Mahesh said exports from Saudi Arabia could reach 9 million barrels per day next year as it focuses on protecting market share.
“It is uniquely positioned relative to other oil producers in a highly competitive market,” he said.
In Libya, three car bombs killed 40 people in the eastern city of Qubbah on Friday, days after Egyptian air strikes on Islamic State militants there.
Libya’s oil output has almost completely collapsed, falling to less than 200,000 barrels per day (bpd) from 1.6 million bpd before the country’s 2011 civil war.