Rising US rig count and strong dollar weigh on West Texas Intermediate and Brent crude oil prices

Francesca Washtell
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Data from Baker Hughes on Friday showed US drillers added four rigs last week (Source: Getty)

Renewed oversupply concerns pushed the prices of West Texas Intermediate (WTI) and Brent crude down more than one per cent today.

WTI futures were trading down 1.33 per cent to $49.68, while Brent futures slid 1.15 per cent to $51.35 per barrel in evening trading.

A rising US rig count was among the factors putting pressure on prices, after a report released on Friday by oil services provider Baker Hughes showed drillers in the US had added four rigs in the week to 14 October. It was the 16th week in a row that drillers had gone without making cuts.

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Despite expectations that Opec members will take action to support a production cut in November, concerns about the market remaining oversupplied for the foreseeable future are still weighing on prices.

"It's very hard for the Brent crude price to sell below the $50 a barrel mark ahead of the November 30 meeting," said Bjarne Schieldrop, chief commodities analyst at SEB.

A strong dollar put added pressure on oil markets. The greenback reached a seven-month high against a basket of other leading currencies, lifted by an expected hike in US interest rates later this year.

Oil prices have also been put under pressure by the latest monthly update from the Organization of the Petroleum Exporting Countries (Opec), released last week, that showed the 14 countries in the group pumped 33.39m (barrels per day) in September.

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This was up 220,000 bpd, mostly from increased production in Nigeria, Libya and Iran.

Opec also increased its forecast for non-Opec supply next year to 240,000 bpd, up 40,000 bpd from its previous estimate due to new projects starting up in Russia.

The group left its global oil demand outlook unchanged, predicting demand growth of 1.15mbpd in 2017.

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