Investing.com - Oil prices edged up on Monday morning in Asia as the U.S. and Canada slashed its crude drilling rigs in a concerted effort to control output amidst fears over a global oversupply.
Crude Oil WTI Futures for February delivery edged up 0.23% to $51.59 a barrel at 11:07 PM ET (04:07 GMT) on the New York Mercantile Exchange, while Brent Oil Futures for February delivery also gained 0.08% to $60.33 per barrel on London’s Intercontinental Exchange.
North America reduced 11 oil rigs in total as of Dec. 14 compared to a week ago, with the U.S. cutting four rigs and Canada slashing seven. The total count of the U.S. drillers dropped to the lowest in two months, while that of Canada fell to a six-month low, according to energy services firm Baker Hughes last Friday and data research platform YCharts.
“Oil is finding support as the drop in Baker Hughes rig counts points to a near-term slowdown in U.S. production,” Stephen Innes, head of trading for APAC at futures brokerage Oanda, told Reuters.
“This, when combined with [expectations] Saudi Arabia…is to cut exports to the U.S. to draw down inventory builds (there) should provide a short-term base despite global slowdown fears, which continue to resonate.”
Oil production cartel, the Organization of the Petroleum Exporting Countries (OPEC), and its allies reached a decision at the meeting earlier this month to cut output from January, pushing up oil prices.
However, Bloomberg reported that Russia’s central bank still cut its crude price outlook for 2019 from $63 to $55 per barrel thanks to “fast output increase” in the U.S.
“The OPEC+ deal allows to limit these risks, but doesn’t remove them," The Bank of Russia Governor Elvira Nabiullina was cited as saying. "Events of this year clearly show how fast producers can increase shale-oil production when prices remain high.”.
The U.S. Energy Information Administration forecasts that crude production in the country will be 12.1 million barrels per day (bpd) next year, up from an estimated 10.9 million bpd on average this year.