Oil Prices Rebound on Reports of U.S. Production Cutback

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Growth of oil or petrol price. Barrels and graph.

Oil prices in European markets rose on Monday, rebounding from steep drops seen in previous sessions after reports of reduced oil drilling activity in the U.S. surfaced.

Crude oil futures on the New York Mercantile Exchange went up by 1.86% or $0.59, to trade at $32.34 per barrel as of 2:50AM ET. On Friday’s close, the Nymex futures declined by 3.58% or $1.18.

According to Industry research group Baker Hughes, the number of oil rigs drilling in the U.S.  has been dropping for 9 consecutive weeks, down 26 last week to 413. The news came amid reports of U.S. oil inventory hitting 2.1 million barrels last week to an all-time high of 504.1 million barrels, fanning fears of a domestic supply glut.

Meanwhile, on the ICE Futures Exchange in London, Brent oil futures rose by 1.45% or $0.48, to trade at $33.49 a barrel after falling $1.27, or 3.7%, on Friday, amid doubts over the freeze deal announced by top oil producers last week.

Major producers Russia and Saudi Arabia brokered a deal with Qatar and Venezuela last week to freeze oil output at January levels, but stopped short of declaring cutbacks in oil production.

Iran’s oil minister endorsed the agreement, saying the deal would help stabilize global oil markets, but remained mum on the possibility of a cutback.

Tehran has indicated multiple times that it is bent on increasing oil exports back to 2011 levels.

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