Oil fell as the US oil rig count rose for a fourth week, but was still poised for a second monthly advance.
Futures in New York are up 3.7 percent this month, even after a 1 percent drop on Monday, following data that showed an increase in U.S. drilling activity. A potential withdrawal in May by U.S. President Donald Trump from a 2015 nuclear deal between world powers and Iran would reimpose sanctions on the Middle Eastern producer and curb its exports. Meanwhile, OPEC is trimming output even after concluding it has cleared 97 percent of the surplus that has weighed on prices.
Oil has surged to levels last seen in 2014 as issues including the conflict in Syria and tensions between Saudi Arabia and Iran-backed rebels in Yemen stoked concerns over supply disruptions. French President Emmanuel Macron’s prediction that the U.S. will pull out of the nuclear deal has boosted speculation over reduced shipments from the Islamic Republic. Still, expanding American drilling activity continues to limit price increases.
“Obviously the rig count that came on Friday was quite bearish,” says Torbjorn Kjus, chief oil analyst at DNB Bank ASA. “There’s a lot of profit in the books here for the non-commercials. You shouldn’t be surprised if there’s a $5 flush out and some profit taking.”
West Texas Intermediate crude for June delivery traded at $67.38 a barrel on the New York Mercantile Exchange, down 72 cents, at 11:12 a.m. in London. Total volume traded was about 13 percent below the 100-day average. The contract fell 0.4 percent last week.
Brent crude for June settlement, which expires Monday, dropped 86 cents to $73.78 a barrel on the London-based ICE Futures Europe exchange. Prices are up 5 percent for the month. The global benchmark crude traded at a $6.40 premium to June WTI. The more-active July contract traded at $72.97.
Trading on the Shanghai International Energy Exchange is closed for a Chinese public holiday. — Bloomberg

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