DECEMBER 4, 2017 – Oil dropped below $58 a barrel as investors weighed an increase in U.S. drilling rigs against OPEC’s promise to extend output cuts through the end of next year.
Oil has advanced for the past three months amid optimism that output cuts by Organization of Petroleum Exporting Countries and its partners are helping to balance the market. Yet U.S. rivals have been expanding their operations, with drillers adding two oil rigs to reach 749 last week, the highest level since late September, according to Baker Hughes.
Brent for February settlement dropped 51 cents to $63.22 a barrel on the London-based ICE Futures Europe exchange. Prices added $1.10, or 1.8 percent, to close at $63.73 on Friday. The global benchmark crude was at a premium of $5.43 to February WTI.
Pioneer Natural Resources Co., Parsley Energy Inc. and Newfield Exploration Co. said that, while they plan to grow, their emphasis will be on maintaining spending discipline and generating profit, rather than just boosting supply on higher oil prices. Pioneer plans to raise output to more than 1 million barrels of oil equivalent a day by 2026 from about 300,000 a day this quarter.