Crude Oil Rises On Decline In US Oil Production

Crude oil futures closed higher in the domestic market on Tuesday as the first weekly decline in U.S. oil-drilling activity since January buoyed expectations that domestic production will see a lasting retreat.

The combination of the falling rig count, along with the drop in U.S. oil production is signaling to the market of a pullback in U.S. production. Still, some analysts say last week’s U.S. output data are hardly compelling as activity was impacted by a tropical storm in the Gulf of Mexico.

Still, investors remain skeptical that oil prices have stabilized because of the potential for stronger output from Libya and Nigeria, members of the Organization of the Petroleum Exporting Countries who aren’t taking part in the cartel-led production-cut agreement.

At the MCX, crude oil futures for July 2017 contract closed at Rs 3067 per barrel, up by 0.79 per cent, after opening at Rs 3039, against a previous close of Rs 3043. It touched the intra-day high of Rs 3075.

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Suhani Verma

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