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U.S. crude prices head towards new 2015 low as drilling rebounds

Published 21/12/2015, 11:19 am
© Reuters.  U.S. crude prices head towards new 2015 low as drilling rebounds
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* U.S. oil rig count rebounds to 541

* U.S. crude stockpiles edge above 490 million barrels

* U.S. glut adds to global oversupply

By Henning Gloystein

SINGAPORE, Dec 21 (Reuters) - U.S. crude oil prices dipped in early Asian trading on Monday, heading towards last week's 2015 lows as a rebound in drilling activity, a strong dollar and brimming storage facilities weighed on prices.

U.S. West Texas Intermediate (WI) crude futures CLc1 were trading at $34.48 per barrel at 0008 GMT, down 25 cents from their last settlement and close to last Friday's 2015 lows. Oil prices are at levels last seen during the peak of the financial crisis of 2008/2009.

Analysts said a strong dollar following last week's U.S. interest rate hike, which makes oil consumption more expensive for countries using different currencies, as well as a renewed increase in U.S. oil rig counts were weighing on crude prices.

"The U.S. oil rig count bounced back this week, up by 17 (to 541), putting an end to four consecutive weekly declines," Goldman Sachs (N:GS) said.

"The increase in rig count even in a low crude oil price environment suggests shale producers are committed to maintaining production levels. The resilient production data reflect rising U.S. crude stockpiles, which have surged to 491 million barrels, the most for this time of year since 1930," ANZ bank said.

The glut in the U.S. oil market adds to global oversupply as the main producers, including the Organization of the Petroleum Exporting Countries (OPEC) and Russia, pump hundreds of thousands of crude every day in excess of demand.

Internationally traded Brent crude futures LCOc1 were down 34 cents at $36.54 per barrel, down more than two-thirds since June 2014 when the price rout began.

The global glut means that the lifting of a decades-old ban on U.S. crude exports that was announced last week is expected to have little immediate impact on oil flows and prices. urn:newsml:reuters.com:*:nL1N1471KH (Editing by Richard Pullin)

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