Oil futures headed lower on Monday (13 February), after the latest rig count data stoked expectations of rising US crude production.
In its latest weekly assessment, oilfield services company Baker Hughes said the number of US oil and gas rigs had risen by 12 on the week to 10 February, and by 200 in year-over-year terms to 741. Concurrently, the Canadian rig count was up by 9 on the week, and 130 year-over-year to 352 rigs.
In response, at 4:31pm GMT, the Brent front month futures contract was 2.05% or $1.16 lower at $55.53 per barrel, while the WTI was down 1.86% or $1.01 at $52.86 per barrel, as both benchmarks shed froth on expectation of rising US production.
On Friday (10 February), the International Energy Agency (IEA) said Opec producers were close to reaching their production cut target for 2017 outlined at their last meeting.
It added that the cartel had achieved 90% of its target of reducing headline oil production by 1.2m barrels per day (bpd) to 32.5m bpd as stated on 30 November, 2016 in Vienna, Austria.
Elsewhere in its latest market update, the IEA also predicted that world oil inventories will fall by 600,000 bpd over the first half of the year if Opec sticks to its agreement.
FXTM research analyst Lukman Otunuga said oil remains entangled in a fierce tug of war as optimism over Opec cutting oil production coupled with fears of US shale pumping oil incessantly keeps investors on edge.
"Oil markets may be injected with extreme levels of volatility this quarter if fears resurface over the oversupply in the global markets making a return. Technical traders may observe how WTI crude reacts to the $54 resistance level with weakness potentially opening a path lower towards $52."
Away from the oil market, precious metals also headed lower as the dollar strengthened. At 4:14pm GMT, the Comex gold futures contract for April delivery was down 0.95% or $11.80 to $1,224.10 an ounce, while spot gold was 0.91% or $11.26 lower at $1,222.36 an ounce.
Finally, Comex silver was down 0.52% or 9 cents to $17.84 an ounce, while spot platinum was 1.26% or $12.79 lower at $998.71 an ounce.