Oil prices steady after U.S. drilling cut

Oil markets were fairly stable in early Asian trading on Monday with U.S. crude contracts receiving support from reduced American drilling.

U.S. crude futures were trading at 44.86 dollars per barrel, up 23 cents from their last settlement, pushed by a slight fall in drilling activity.

“Baker Hughes reported U.S. oil rig count fell 10 to 652 last week. The consecutive second decline suggests a low price environment coupled with low oil price hedge is starting to impact U.S. supply,” ANZ bank said.

The International Energy Agency said on Friday that a cut in production from non-OPEC suppliers, especially the United States, would lead to rebalancing of the market by next year.

The global crude benchmark Brent was trading at 48.16 dollars a barrel.

ANZ said strong supply from the Middle East remained a concern on the supply side, while Macquarie Bank noted that falling auto sales in August were acting as a drag on demand.

“Sales were 1.0 per cent lower year-on-year, slightly more than the 0.8 per cent fall seen in July 2015,” the bank said. It added that sales could pick up towards the end of the year