Oil halts gain near $54 as rising US drilling damps Saudi cuts

Oil halted its advance below $54 a barrel as an increase in US drilling countered signs Organisation of Petroleum Exporting Countries (OPEC) members including Saudi Arabia are sticking to planned output cuts to stabilise the market. Futures slid as much as 0.5 per cent in New York after rising 3.2 per cent the previous three sessions. US drillers added rigs for the tenth straight week to the highest level in a year, according Baker Hughes Inc. Saudi Arabia is among OPEC producers leading a reduction in supply, the group’s Secretary-General Mohammad Barkindo said in an interview with Kuwait’s official news agency. Oil last year capped its biggest annual gain since 2009 as the OPEC and 11 other nations agreed to curb output starting January 1 in an effort to trim a global inventory glut. While suppliers from Iraq to Kuwait say they have started to curb supply, an increase from countries such as Libya - exempt from cuts - could put pressure on prices. “We are getting anecdotal evidence of OPEC production cuts and that’s enough to hold the market firm,” said Ric Spooner, chief market analyst at CMC Markets in Sydney. “The oil market has found a temporary equilibrium point and appears content to sit around that level at the moment.” West Texas Intermediate for February delivery slid as much as 26 cents to $53.73 a barrel on the New York Mercantile Exchange and was at $53.82 at 8.56 am in Hong Kong. Total volume traded was about 80 per cent below the 100-day average. The contract rose 23 cents to $53.99 a barrel on Friday to cap a fourth weekly gain. Brent for March settlement lost as much as 29 cents, or 0.5 per cent, to $56.81 a barrel on the London-based ICE Futures Europe exchange. The global benchmark crude traded at a premium of $2.28 to March WTI. (Perry Williams and Ben Sharples/Bloomberg)