Oil prices are holding steady over the $50 a barrel mark on Monday following a statement from OPEC Secretary-General Mohammad Barkindo stating he’s “cautiously optimistic that the market is already rebounding.”
OPEC’s agreement to cut oil production to raise prices has led to an uptick in oil rigs in the United States. The number of rigs drilling rose to levels last seen in September 2015. The United States’ oil production has weighed on investors who hoped OPEC’s oil production cuts would help oil prices rise.
United States rigs have increased to 662 to mark the strongest gain in active oil rigs in the country since 2011. Rigs increased for the 11th week straight, with 9.15 million barrels of oil produced in the U.S. per day.
The U.S. added 10 rigs last week, according to Baker Hughes. The energy services firm further states that there is a prospect for more U.S. shale production, too.
Inflated inventory levels led oil prices to drop and a January concerted effort to lower output.
OPEC to Meet in May
OPEC will meet in May to discuss an extension to oil cuts. Oman, a member of OPEC, has shown support for an extension to the oil cuts.
West Texas Intermediate rose to $50.77 on Monday for May delivery. Prices for oil rose $2.63 last week. Brent for June delivery is up to $53.59 a barrel, a $0.06 increase in London trade.
Libya’s production output is causing uncertainty as the country’s largest oil field resumed production on Wednesday. The oil field produced 220,000 bpd before being shutdown on March 27 due to disruptions.
The field’s production is expected to be a swing factor for oil prices, but started producing just 80,000 bpd on Sunday.
Asia’s strong manufacturing data helped strengthen oil further to start the week, as the country’s sector will continue to be a strong consumer of energy.