Oil holds advance near three-week high as US drilling slows

Oil holds advance near three-week high as US drilling slows
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HONG KONG (Feb 1): Oil held gains near a three-week highs as U.S. drilling contracted for the 20th time out of the last 22 weeks.

Futures were little changed in New York after earlier swinging from a gain of as much as 1.7 percent to a 0.6 percent loss. Drill rigs targeting oil in the U.S. dropped by 12 to 498, the lowest since 2010, data from Baker Hughes Inc. shows. Output from the Organization of Petroleum Exporting Countries rose to a record in January after Indonesia’s membership was reactivated, according to data compiled by Bloomberg.

Oil slumped 9.2 percent in January as volatility in global markets added to concern over brimming U.S. stockpiles and the outlook for increased exports from Iran after the removal of sanctions. OPEC production increased by 48,000 barrels a day to 33.11 million a day last month, led by gains from Kuwait and Nigeria.

West Texas Intermediate for March delivery gained as much as 56 cents to $34.18 a barrel on the New York Mercantile Exchange and was at $33.63 at 8:01 a.m. Hong Kong time. The contract climbed 40 cents to $33.62 a barrel on Friday to cap a 4.4 percent weekly increase. Total volume traded was about 54 percent above the 100-day average.

Brent for April settlement was 8 cents lower at $35.91 a barrel on the London-based ICE Futures Europe exchange. The March contract expired Friday after advancing 85 cents to $34.74. The European benchmark crude was at a premium of 65 cents to WTI for April