Oil prices rose on Monday as the market digested news of a modest rise in U.S. drilling activity.
Uncertainty lingered over the outcome of a meeting of the world’s major exporters next month to discuss freezing output.
U.S. energy firms last week added one oil rig after 12 weeks of cuts, according to data from industry firm Baker Hughes.
Oil rigs have fallen by two-thirds over the past year to their lowest since 2009.
This surprise addition suggested the drop-off in crude drilling may be stabilising after the oil price’s 50-per cent rally since February.
“We would not over-interpret this (rise in rigs), however, given that the oil rig count is still at its lowest level since 2009.
“What is more, there have been only two weekly increases in the oil rig count since August – neither of which proved lasting,” Commerzbank analysts said in a note.
Brent crude futures were 52 cents higher at $41.72 a barrel by 1355 GMT, having risen from a session low at $40.48 while U.S. futures rose 48 cents to 39.92 dollars.
The Commerzbank analysts said U.S. oil production still appeared fairly robust, due in part to special factors such as temporarily higher productivity and producers’ price hedging strategies.
“We, therefore, continue to expect U.S. oil production to decline sharply in the coming weeks and months.”
The Federal Reserve’s more cautious note last week on the outlook for U.S. interest rates sapped the dollar of some strength.
That theoretically encourages demand for dollar-priced assets such as commodities, as these become less costly for overseas investors.
