Global crude oil prices have slipped marginally after American oil exploration companies scaled up the deployment of rigs.
As of 4 December, US West Texas Intermediate CLc1 declined 46¢ to remain at $57.90 a barrel, while brent futures LCOc1 fell by 39¢, settling at $63.34 a barrel, according to Reuters.
The US-based drillers increased the number of oil rigs from 477 last year to around 749, due to increased budgetary allocations for this year.
BMI Research was quoted by the news agency as saying: “The extent of US production growth and the strength of global oil demand in 2018 remain the main uncertainties. OPEC will increasingly work to manage the market.”
Through the increased spending plans, American companies intend to benefit from oil price recovery made possible by the agreement reached by the Organisation of the Petroleum Exporting Countries (OPEC) and some non-OPEC producers, including Russia, last year to cut oil production by 1.8 million barrels per day (bpd).
Scheduled to expire in March next year, the production cuts have been extended until December in a recent meeting between OPEC and other non-OPEC producers.
Notwithstanding the latest agreement, producers can choose to exit the deal early, in case the market overheats.
Meanwhile, Russia is wary of possible increase in US oil production caused by the extension of the output cuts.
In September, US production jumped to 9.5 million barrels a day, which represents the highest monthly output since 9.6 million barrels a day in April 2015.