- U.S. oil production, refinery facilities reopen after storm Nate
- U.S. rig count drops by two to 748 last week
- Speculators raise bullish bets on U.S. crude futures -CFTC
- Saudi Arabia expected to support oil prices ahead of Aramco IPO
Oil prices stabilized on Monday, after a 2 percent slide on Friday, as the number of rigs drilling for new oil in the United States dipped and on expectations that Saudi Arabia would continue to restrain its output to support the market.
U.S. West Texas Intermediate (WTI) crude futures were trading at $49.38 per barrel at 0702 GMT, up 9 cents from their last close.
Brent crude futures were flat from their last close, at $55.62 a barrel.
Trading activity was low on Monday due to the Columbus Day holiday in the United States, although markets there are open.
Oil tumbled by 2 percent on Friday, with WTI dipping back below $50 per barrel, as concerns of overproduction re-surfaced.
But traders said a reported cut in the number of U.S. oil rigs drilling for new production had halted the price fall.
The U.S. rig count fell by two to 748 last week, General Electric Co’s Baker Hughes energy services firm said on Friday.
As a sign of stronger market sentiment, money managers raised their bullish bets on U.S. crude futures for the third week in a row, the U.S. Commodity Futures Trading Commission reported on Friday.
The investors raised combined futures and options position in WTI on the NYMEX and ICE markets by 3,211 contracts to 288,766 in the week to Oct. 3, its highest since mid-August, the data showed.
Meanwhile, oil ports, producers and refiners in Louisiana, Mississippi and Alabama – which shut facilities ahead of Hurricane Nate – were planning to reopen on Monday as the storm moved inland, away from most energy infrastructure on the U.S. Gulf Coast.
Traders said that Nate’s impact had been lower than that of hurricanes hitting the region in the past month.
“I don’t think this one (Nate) will have much of an impact on production…What will be impacted though is the refining sector,” said Matt Stanley, a fuel broker with Freight Investor Services (FIS) in Dubai. “With U.S. crude exports surging and U.S. demand falling seasonally we could see the refining margins start to fall sooner rather than later.”
Outside the United States, analysts said a Saudi Arabian commitment to support the market by restraining output would likely prevent crude from falling further.
“We remain fairly confident that the Saudi’s will look to continue to support the oil market, especially until the sale of Aramco,” said Shane Channel, equity and derivatives adviser at ASR Wealth Advisers.
State-owned oil giant Saudi Aramco is planning to float around 5 percent of the firm in an initial public offering next year.