U.S. WTI prices were unchanged as of 1:08 p.m. HK/SIN as oil prices struggled to maintain prices near the 2014 highs they hit last week. Brent crude was modestly higher, up 2 cents per barrel to $74.08 per barrel. According to General Electric’s Baker Hughes energy services firm the United States added five oil rigs drilling for new production last week. The total count now sits at 820 rigs, the highest since March 2015. The increase in U.S. rigs supports expectations for an increase in U.S. crude production which is already at a record high of 10.54 million barrels per day. At the moment only Russia produces more than the U.S. on a daily basis. Increased U.S. production has prevented oil prices from soaring higher despite OPEC’s best efforts to drive prices upwards. Nevertheless, Brent crude futures are up by approximately 20 percent from lows hit in February, signaling that OPEC’s efforts have not been in vain.
Oil prices have been supported not only by OPEC’s widespread production cuts but by rising demand in Asia and U.S. sanctions against Russia, Venezuela and Iran which are all key oil producers. On May 12th the U.S. will have to announce whether it will remain in the Iran nuclear deal or withdraw, a step which would likely lead to new sanctions against Iran and could send prices higher. President Trump has said that he remains unhappy with the deal, though he has not confirmed his ultimate intent prematurely.
Last Friday, Trump suggested the OPEC has been “artificially” boosting oil prices and that he will not let this continue. His accusation was not viewed favorably by global oil producers though it did not spark any immediate reaction.