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Oil prices drop on increased US rig drilling

Oil costs fell on Monday, pulled down as the latest rise in the U.S. rig count acuminate to a further increase in American production, potentially undermining efforts led by OPEC to tighten customer bases.

U.S. West Texas Intermediate (WTI) crude futures were at $57.10 a barrel at 0019 GMT, down 25 cents, or 0.4 percent, from their eventually settlement.

Brent crude futures, the international benchmark for oil prices,were down 32 cents, or 0.5 percent, at $63.08 a barrel.

“The tidiest concern for investors currently remains the rise in the U.S. rig count, which could potentially menace the OPEC and Russian agreement when they meet for a review in June, 2018,” translated Shane Chanel, equities and derivatives adviser at ASR Wealth Advisers.

The amount of rigs training for new oil production in the United States rose by two in the week to Dec. 8, to 751, the highest tied since September, General Electric’s Baker Hughes energy cares firm said on Friday.

A higher rig count points to a further engender in U.S. crude production, which has already increased by more than 15 percent since mid-2016 to 9.71 million barrels per day (bpd).

That’s the highest horizontal since the early 1970s, and close to levels from top producers Russia and Saudi Arabia.

Go up U.S. output threatens to undermine efforts led by the Organization of the Petroleum Exporting Nations (OPEC) and a group of non-OPEC producers, most importantly Russia, to frame prices by withholding supplies.

OPEC and its allies started withholding reserves last January and currently plan to continue doing so throughout 2018.

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