Oil prices stabilized on Monday, after a 2 percent
slide on Friday, as the number of rigs drilling for new oil in the
United States dipped and on expectations that Saudi Arabia would
continue to restrain its output to support the market.
Oil tumbled by 2 percent on Friday, with WTI dipping back below $50 per barrel, as concerns of overproduction re-surfaced.
State-owned oil giant Saudi Aramco is planning to float around 5 percent of the firm in an initial public offering next year.
U.S.
West Texas Intermediate (WTI) crude futures were trading at $49.38 per
barrel at 0702 GMT, up 9 cents from their last close.
Brent crude futures were flat from their last close, at $55.62 a barrel.
Trading activity was low on Monday due to the Columbus Day holiday in the United States, although markets there are open.
But traders said a reported cut in the number of U.S. oil rigs drilling for new production had halted the price fall.
The U.S. rig count fell by two to 748 last week, General Electric Co’s Baker Hughes energy services firm said on Friday.
As
a sign of stronger market sentiment, money managers raised their
bullish bets on U.S. crude futures for the third week in a row, the U.S.
Commodity Futures Trading Commission reported on Friday.
The
investors raised combined futures and options position in WTI on the
NYMEX and ICE markets by 3,211 contracts to 288,766 in the week to Oct.
3, its highest since mid-August, the data showed.
Meanwhile,
oil ports, producers and refiners in Louisiana, Mississippi and Alabama
- which shut facilities ahead of Hurricane Nate - were planning to
reopen on Monday as the storm moved inland, away from most energy
infrastructure on the U.S. Gulf Coast.
Traders said that Nate’s impact had been lower than that of hurricanes hitting the region in the past month.
Outside the United States,
analysts said a Saudi Arabian commitment to support the market by
restraining output would likely prevent crude from falling further.
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