(November 12, 2017) Crude oil prices were mixed in Asia with WTI getting a boost on a pipeline disruption in the Middle East and concerns that oil facilities suffered damage from a deadly earthquake that struck areas of Iran and Iraq earlier on Monday.
U.S. West Texas Intermediate (WTI) crude futures rose 0.11% to $56.80 a barrel. Meanwhile, Brent crude futures, the benchmark for oil prices outside the U.S., fell 0.14% to $63.58 a barrel.
Helping oil rebound some in Asia this morning is an explosion at a Saudi-Bahraini pipeline and the prospect that a large earthquake in Iraq and Iran could have damaged oil infrastructure there, notes OM Financial’s Stuart Ive.
In the week ahead, monthly reports from the Organization of Petroleum Exporting Counties on Monday and the International Energy Agency on Tuesday will be closely-watched to assess global oil supply and demand levels.
Last week, oil prices settled a bit lower on Friday, with a recent rally finally showing signs of slowing after closely-watched data showed an uptick in U.S. drilling activity.
Oilfield services firm Baker Hughes reported that the number of active U.S. rigs drilling for oil rose by nine to 738 last week, underlining worries that U.S. producers will ramp up output with prices holding near 28-month highs.
The weekly rig count is an important barometer for the drilling industry and serves as a proxy for domestic oil production.
Oil’s rally, which began in early October, has been largely driven by expectations that oil producing countries will agree to extend an output cut at their meeting at the end of this month.
Under the original terms of the deal, OPEC and 10 other non-OPEC countries led by Russia agreed to cut production by 1.8 million barrels a day (bpd) for six months. The agreement was extended in May of this year for a period of nine more months until March 2018 in a bid to reduce global oil inventories and support oil prices.
Discussions are continuing in the run-up to the Nov. 30 meeting, which oil ministers from OPEC and the participating non-OPEC countries will attend.
Prices received another boost amid ongoing unrest in the Middle East as well as escalating tensions between Saudi Arabia and Iran.
Saudi Arabia is among the world’s top producers of oil and OPEC’s most influential member.