Oil mostly flat as rising USA output offsets OPEC worries

Oil mostly flat as rising USA output offsets OPEC worries

Output curbs by the Organization of Petroleum Exporting Countries and allied suppliers have buoyed prices, with producers promising to continue the curbs for all of 2018. Saudi Arabian Oil Co.is set to appoint banks including Goldman Sachs Group Inc. and Citigroup Inc.to help manage its initial public offering, people familiar with the matter said, as the state-owned crude producer pushes ahead with what could be the world's largest share sale.

Traders said the gains were due to a slight decline in the number of U.S. rigs drilling for new production, which eased by five in the week to January 5, to 742, according to data from oil services firm Baker Hughes.

The recent strength in crude has spurred speculation that American shale producers may be encouraged to expand drilling to take advantage of rising prices, countering the effect of cuts by Opec and its partners.

"Brent's spectacular vault over $68/barrel this week, with WTI managing to breach the $62 mark, prompted a chorus of calls for a price correction", Vanda Insights said in its weekly newsletter on Friday.

"The U.S. oil price is now into a range that is anticipated to attract increased shale oil production", said Ric Spooner, chief market analyst at CMC Markets in Sydney.

Brent futures gained 16 cents, or 0.2 percent, to settle at $67.78 a barrel, while U.S. West Texas Intermediate (WTI) crude rose 29 cents, or 0.5 percent, to settle at $61.73. Total volume traded was about 11 percent below the 100-day average.

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States where prices moved most last week were: IN and MI (down seven cents); OH (down five cents); Minnesota and CT (up four cents); Alabama, California and Idaho (up three cents); and IL and Kentucky (down three cents).

Among the 50 states, 38 experienced gas price increases last week. The global benchmark crude traded at a premium of $6.06 to March WTI.

In the USA, drillers are seeking to do more with less in a bid to boost profits.

Their money-saving moves include opening already-drilled wells by fracking them rather than deploying more rigs to start new ones.

Yet, surging US production could offset some of the cuts from OPEC producers, as USA production rose to 9.78 million barrels a day (MMBPD) in the latest week, according to last Wednesday's report.

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