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MTECHTIPS:-Crude oil futures – weekly outlook: August 10 – 14

MTECHTIPS:-Crude oil futures – weekly outlook: August 10 – 14

Crude oil futures tumbled towards six-year lows on Friday, amid indications that the sharp decline in U.S. drilling in recent months may be nearing an end, raising concerns that shale production could rebound and add to a supply glut. On the New York Mercantile Exchange, crude oil for delivery in September hit an intraday low of $43.70 a barrel, a level not seen since January 29, before ending at $43.87, down 79 cents, or 1.77% on the day. For the week, New York-traded oil futures plunged $2.99, or 6.9%, the eighth consecutive weekly loss, as worries over high domestic U.S. oil production weighed. Industry research group Baker Hughes (NYSE :BHI) said late Friday that the number of rigs drilling for oil in the U.S. increased by six last week to 670, the third straight weekly gain. There are still about 60% fewer rigs working since a peak of 1,609 in October, though the pace of declines has slowed considerably in recent weeks, fueling concerns that U.S. shale production could rebound in the months ahead. Elsewhere, on the ICE Futures Exchange in London, Brent for September delivery fell to a session low of $48.42 a barrel, the weakest level since March 2009, before closing at $48.61, down 91 cents, or 1.84%. On the week, London-traded Brent futures lost $2.94, or 6.9%, the sixth straight weekly decline, as ongoing concerns over a glut in world markets continued to drive down prices. Global oil production is outpacing demand following a boom in U.S. shale oil production and after a decision by the Organization of Petroleum Exporting Countries last year not to cut production. Meanwhile, the spread between the Brent and the WTI crude contracts stood at $4.74 a barrel by close of trade on Friday, compared to $5.09 in the preceding week.
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