Oil hits April 2009 low, then pares loss on U.S. oil rig data
Reuters
Published Jan 09, 2015 02:26PM ET
Oil hits April 2009 low, then pares loss on U.S. oil rig data
By Barani Krishnan
NEW YORK (Reuters) - Global oil prices resumed their slide on Friday after two days of relative calm, with Brent and U.S. crude hitting their lowest level since April 2009, before paring losses on data showing a steep drop in U.S. oil drilling rigs.
Benchmark Brent crude broke below $49 a barrel but returned to above the $50 support level it had seen earlier in the week after oil services firm Baker Hughes reported the largest drop in 24 years in U.S. drilling rigs.
Oil prices had barely moved in the past two sessions after tumbling 10 percent the first two days of the week.
Early in New York trade, crude oil drifted about 50 cents lower as robust U.S. jobs data for December helped limit losses.
The sell-off gained force about an hour before noon, with both Brent and U.S. crude falling to April 2009 lows. But it recovered somewhat after the rig count data.
"In my opinion we have not stabilized out yet, but the rig data and some short-covering ahead of the weekend is helping the market pare losses," said Tariq Zahir, managing member at Tyche Capital Advisors in Laurel Hollow in New York.
By 2:05 p.m. EST (1845 GMT), Brent LCOc1 was down 1.05 cents at $49.91 a barrel, after a session low at $48.90.
U.S. crude CLc1 traded 58 cents lower at $48.21, after falling to $47.16 earlier.
The number of rigs drilling for oil in the United States fell by 61 this week, the most in a week since 1991, the Baker Hughes report showed. The number of oil rigs has declined in 10 of the last 13 weeks since hitting a record high of 1,609 in mid-October. The current rig count of 1,421 in the week to Jan. 9 is the lowest level since February.
Oil analysis firm Wood Mackenzie said in a report on Friday that even at $40 levels, only less than 2 percent of global crude production was expected to be at risk.
"Operators may prefer to continue producing oil at a loss rather than stop production - especially for large projects such as oil sands and mature fields in the North Sea," Wood Mackenzie analyst Robert Plummer said.
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