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West Texas Crude settles lower on Bakken news

Published 12/19/2016, 12:51 PM
Updated 12/19/2016, 01:03 PM
© Reuters.  Goldman Sachs: U.S. oil producers increase rig construction 61%.
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Investing.com - West Texas Intermediate Crude Oil settled lower on Monday.

The closing price was $52.09, and was down 0.02% from the settlement on Friday.

Brent Oilwas unchanged early Tuesday morning in London at $54.92.

Unexpected news from America -- and the Bakken Formation in North Dakota -- is impacting pricing.

U.S. oil output is poised to grow as American energy companies last week continued to add oil rigs, extending a seven-month drilling comeback, according to the investment bank, Goldman Sachs (NYSE:GS), in New York City.

"Since its trough on May 27, producers have added 194 oil rigs (+61%) in the U.S.," U.S. bank Goldman Sachs said.

Crude oilprices were up a bit on Monday morning. Traders are wondering if U.S. production from shale fields will grow enough to replace planned output cuts by OPEC, Russia, and other producers early next year. The Russians need the money to finance the production of 2500 tanks, slotted for Eastern Europe.

Brent oilfutures for February delivery were down by 24 cents, or 0.4%, at $54.97 a barrel just before noon. U.S. West Texas Intermediate crude for January rose 6 cents, or 0.1%, to $51.96 per barrel.

"Implied U.S. output increases...will offset a significant portion of the planned OPEC production cuts especially since we don't anticipate sustained strong compliance," Jim Ritterbusch, president of the noted Chicago-based energy advisory firm Ritterbusch & Associates, said in a research memo to investors. "While adherence to (OPEC) cutbacks could be quite high initially, we will be surprised by compliance much above 60% by the end of the first quarter as (U.S.) shale responds to a higher price environment."

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