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New data showed the first decline in the number of active US oil rigs in 24 weeks and fed expectations for further reductions in crude production.

Brent crude futures climbed 0.3 percent, to $48.93 per barrel, after jumping 5.2 percent last week, its first weekly gain in six weeks, U.S. West Texas Intermediate (WTI) crude futures rose 0.5 percent, to $46.28 per barrel, adding to last week's 7 percent gain, according to Reuters. The latest data show that U.S. crude oil inventories are at 509 million barrels, more than 50 percent higher than what it was as of end-2013.

U.S. drilling activity slipped for the first time since January.

In our article last week, we discussed how the global supply glut in oil, coupled with weak demand, has put the oil market back in bear territory. OPEC and non-OPEC members cut production by 1.8 million barrels per day to stabilize prices in their November 2016 meeting in the OPEC headquarters Vienna.

OPEC's decision in late 2016 to return to a policy of limiting supply, in cooperation with Russian Federation and other non-members, marked the end of a two-year period in which the group pumped at will in a Saudi-led shift to curb rival output and boost market share, which accelerated a drop in prices. They've watched as oil prices have slipped despite production cuts by the Organization of Petroleum Exporting Countries.

At 8:52am EDT on Thursday, WTI Crude was up 1.16 percent at US$45.26, while Brent Crude was trading up 1.18 percent at US$47.87. At 756 rigs, United States oil rigs have more than doubled from the same time a year ago and point to more increases in oil output.

"The production and rig count cut last week has changed the short-term focus and this has made the market relative immune to news on the production front, such as the latest crank up in Libyan production", Ole Hanson, the head of commodity strategy at SaxoBank, told UPI.

The primary concern for oil market investors is that the global oversupply question still looms large.

OPEC and Russia's supply quotas were offset by robust production from the U.S.

US oil traders are hoping the sweltering days of July are also hot ones for demand, believing the new month is the last best opportunity this year to see the overhang of inventories finally subside.

Experts also believe that there is a clear risk that inventory normalization will not take place until the end of March next year when the OPEC cut will come into force.

"To put that in context, that is almost a quarter of the 1.2 million barrels (per day) OPEC agreed to cut", said Greg McKenna, chief market strategist at AxiTrader.

Weekly Summary: Rigs engaged in exploration and production in the US totaled 940 for the week ended June 30, 2017.