Oil struggles as markets weigh U.S. drilling, OPEC cuts

Commodities & Futures
© Reuters.  Oil edges lower © Reuters. Oil edges lower

Investing.com – Oil prices swung between gains and losses in European trading on Monday, as the market weighed rising U.S. drilling against efforts by major producers to cut output to reduce a global glut.

The July contract shed 6 cents, or around 0.1%, to $ 49.74 a barrel by 3:20AM ET (07:20GMT).

Elsewhere, for August delivery on the ICE Futures Exchange in London dipped 5 cents to $ 52.46 a barrel.

Trading volumes were likely to remain light with U.S. markets closed Monday for Memorial Day while the U.K. is also shuttered for a public holiday.

Oil ministers from the Organization of Petroleum Exporting Countries and other major producing countries, such as Russia, agreed to extend supply cuts of 1.8 million barrels per day until the end of the first quarter of 2018.

While OPEC’s move had been widely expected, some oil market investors had hoped producers would agree to longer or deeper cuts to drain a global glut of crude supplies.

So far, the production-cut agreement has had little impact on global inventory levels due to rising supply from producers not participating in the accord, such as Libya and Nigeria, and a relentless increase in U.S. shale oil output.

Data from energy services company Baker Hughes showed on Friday that U.S. drillers last week added rigs for the 19th week in a row, the longest such streak on record, implying that further gains in domestic production are ahead.

The U.S. rig count rose by 2 to , extending an 11-month drilling recovery to the highest level since April 2015.

Elsewhere on Nymex, for July inched down 0.2 cents to $ 1.623 a gallon, while July was little changed at $ 1.566 a gallon.

for July delivery sank 7.8 cents to $ 3.232 per million British thermal units.

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