Oil edged up to about $49 a barrel on Monday as fewer drilling rigs were added in the US, helping ease concerns that surging shale supplies will undermine Opec-led production cuts.
US drillers added two oil rigs in the week to July 14, bringing the total to 765, Baker Hughes said on Friday. Rig additions in the past four weeks averaged five, the slowest pace since November.
Expectations that a long-awaited crude market rebalancing was under way was also bolstered by the sharp drop in US crude inventories in the week to July 7.
“The most pronounced inventory reduction in the US in 10 months and the resulting decline in US crude oil stocks to below the 500 million-barrel mark in the last reporting week have clearly prompted a shift in sentiment,” said Carsten Fritsch, analyst at Commerzbank.
“The oil rig count only rose by two – yet prices would have responded negatively to this just a few weeks ago.” Brent crude, the global benchmark, was up 5 cents at $48.96 a barrel by 1219 GMT. US crude traded at $46.49, down 5 cents. Oil prices are less than half their mid-2014 level because of a persistent glut, even after the Opec with Russia and other non-Opec producers cut supplies since January.