Oil prices rise as US production dips

October 31, 2015 | 11:50

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Oil prices in New York rose for the third straight session on Friday (Oct 30) as US data showed a drop in oil output following drilling cutbacks.

A motorist filling up his vehicle at a petrol kiosk. (Photo: AFP/Federico Parra)

NEW YORK: Oil prices in New York rose for the third straight session on Friday (Oct 30) as US data showed a drop in oil output following drilling cutbacks.

US benchmark West Texas Intermediate for delivery in December advanced 53 cents to US$46.59 a barrel on the New York Mercantile Exchange, bringing the week's gain to 4.5 per cent.

European benchmark Brent oil for December delivery gained 76 cents to US$49.56 a barrel in London.

Data from the US Department of Energy showed oil production down 45,000 barrels per day in August from the July level at 9.3 million barrels per day.

The Baker Hughes rig count for oil, a closely-watched benchmark of drilling activity, fell by 16 rigs to 578, down 64 per cent from the year-ago level for the week ending Oct 30.

Chevron said Friday it would cut its 2016 capital budget by about 25 per cent to $25-28 billion from the 2015 levels.

ExxonMobil also said it was spending less as well. Both Exxon and Chevron reported big earnings declines due to lower oil prices.

"The market continues to be hopeful that production is declining in the US," said Andy Lipow of the Houston consultancy Lipow Oil Associates.

Lipow said investors are looking ahead to 2016 and trying to determine if the "supply and demand picture is going to be much better on balance, or if we are still going to be in a pervasively oversupplied situation."

AFP

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