By Jessica Resnick-Ault
NEW YORK (Reuters) - Oil prices fell on Friday after a three-day rally ran out of steam as a higher U.S. rig count signalled rising production from shale, contributing to the global supply glut.
Prices have been locked within a range during the first quarter as traders searched for signals that the Organisation of the Petroleum Exporting Countries' production cuts are effective or that U.S. production is continuing to offset efforts to rebalance the market.
Brent crude futures
Brent futures settled down 13 cents at $52.83 a barrel. The contracts have lost around 7 percent since the previous quarter, the largest quarterly losses since late 2015.
U.S. crude futures
Oil prices had gained momentum this week on a growing sense that OPEC and non-member Russia would extend their production cut, seeking to drive the market higher.
"There's resistance at $52 to $53 a barrel," said Tony Headrick, energy market analyst CHS Hedging. Additionally, the WTI-Brent spread, which widened early in the month, narrowed to the tightest since March 3, after exports picked up last week, he said.
The U.S. energy department on Friday released supply and demand figures for January, the latest month available, saying the country's oil demand for that month was up 0.9 percent at 19.234 million barrels per day, while production rose 60,000 bpd to 8.835 million barrels. [EIA/PSM]
Energy services firm Baker Hughes said U.S. oil rigs increased by 10 to 662 in the week, making the first quarter the strongest for oil rig additions since mid-2011. [RIG/U]
The indicator has shown huge gains, with the rig count doubling in a 10-month recovery and undermining efforts led by OPEC to rein in output.
"I wouldn't be surprised to see some profit-taking ahead of the weekend after the strong gains in recent days," said Carsten Fritsch, commodity analyst at Commerzbank.
OPEC and non-OPEC producers including Russia agreed late last year to cut output by almost 1.8 million barrels per day in the first half of 2017 to ease a global supply overhang and prop up prices.
Nevertheless, analysts polled on a monthly basis by Reuters have slightly lowered their oil price expectations for this year.
(Additional reporting by Henning Gloystein in Singapore and Karolin Schaps in London; Editing by Richard Chang and Matthew Lewis)
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
