Oil down on concerns Oil fell more than 2 per cent on Monday as signs of growing U.S. production outweighed optimism that many other producers, including Russia, were sticking to a deal to cut supplies in a bid to bolster the market.
Brent crude futures were down $1.30, or 2.3 per cent, at US$55.80 a barrel at 1414 GMT, after touching a intra-day low of US$55.69. U.S. crude futures were trading at US$52.73 per barrel, down $1.26, or 2.3 per cent, compared with a session low of US$52.64.
“We see the optimism surrounding OPEC and non-OPEC production cuts being counterbalanced by fears of higher U.S. crude production as the higher rig count of last Friday still weighs,” said Hans van Cleef, senior energy economist at ABN Amro.
Last week, U.S. energy companies added oil rigs for a 10th week in a row to 529, Baker Hughes data showed, extending a recovery in activity into an eighth month.
Analysts at Barclays said they expected the US rig count to rise to 850-875 by the end of the year.
This raised concerns that U.S. production is increasing and undermining efforts by the Organization of the Petroleum Exporting Countries (OPEC) and others to cut output.
Alberta still in a slump, some oil industry players have an idea to get people back to work
It’s now 2½ years into the oil price downturn and, by most measures, Alberta is still in a rut.
The economy is expected to come out of recession this year and oil prices are showing some strength, but there are still 215,000 people without a job, and as of December, more than 14,000 of them had been out of work for more than a year.
At the same time, the province is dealing with an ongoing problem of abandoned and inactive oil and gas wells, which count in the tens of thousands. The Orphan Well Fund, which reclaims wells as a last resort in the case of bankruptcy, has seen its inventory of defunct wells skyrocket to nearly 1,400, from 162 in 2014.
Oil prices broke below $50 a barrel Monday, skidding down $2.65 before climbing back to close at $50.04 a barrel.
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