World oil prices edge higher as US production down

World oil prices edged have edged higher on lingering optimism over falling US production.

US benchmark West Texas Intermediate for March delivery firmed three cents to $ 51.96 a barrel compared with Friday’s close.

Brent North Sea crude for April rose 54 cents $ 62.06 a barrel in London midday trade.

Crude has been on a rollercoaster for the past two weeks after plunging about 60% to around $ 40 between June and late January due to concerns of a global supply glut.

“Prices are fragile and could easily plummet if fundamentals do not improve,” said Daniel Ang, investment analyst at Phillip Futures in Singapore. 

WTI had jumped $ 1.57 and Brent crude gained $ 2.24 on Friday after data showed another drop in the number of oil rigs in operation in the United States. 

According to the Baker Hughes US drilling rig count, the number of rigs in operation fell by 84 to 1,056 in the week to February 13.

The falling oil rig count, coupled with announcements by major oil companies of curtailed investments, have raised hopes that US output is tapering. 

But traders are divided on where the market could head next.

“The price of oil remains volatile on a weekly basis as it see-saws to the hot and cold winds of the (US) inventory numbers on Wednesday and the rig count release on Friday,” said Nicholas Teo, market analyst at CMC Markets in Singapore. 

“Oil traders continue to determine the short-term pricing of crude,” he added. 

With few fresh leads expected, analysts said oil prices are likely to trade sideways. US financial markets are closed for the Presidents’ Day Holiday.

Dow Futures

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