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Oil prices off session highs, U.S. rig count up by 11 | Reuters

 Oil prices off session highs, U.S. rig count up by 11
| Reuters

By Ethan Lou

NEW YORK Oil prices drifted around unchanged on Friday, retreating from early highs after data showed the first double-digit growth in U.S. oil rigs since crude prices hit $50 a barrel.A closely watched report from oil services firm Baker Hughes showed the number of active U.S. oil rigs rose by 11 this week, the 17th week without a decline in the rig count. The last time U.S. oil rigs rose by 10 or more was two months ago, when there were 15 additions in the week of Aug. 15 and 10 in the week of Aug. 19. U.S. crude prices then ranged between $44 and $48.In Friday's session, U.S. West Texas Intermediate crude CLc1 was up 1 cent at $50.64 a barrel. The session high was above $51.

Brent crude LCOc1 showed a 25-cents gain at $51.61, after a session peak at $51.89."This is what we've been anticipating. With prices at these levels and rising, rig count increases will likely be in the double digits hereon," said Tariq Zahir, crude trader at Tyche Capital Advisors in New York.Some traders and analysts have warned for weeks that U.S. shale oil drillers, responsible for much of the worldwide crude glut of the past two years, were likely to ramp up activity with WTI back at above $50 from 12-year lows of around $26 in February.

"The day's still young," said Donald Morton, who runs an energy-trading desk at Herbert J. Sims & Co in Fairfield, Connecticut, after the Baker Hughes data. "Don't be surprised if this market finishes 30 or 40 cents down towards the end."Oil prices are up about 13 percent since the Organization of the Petroleum Exporting Countries (OPEC) announced on Sept. 27 its first planned output cut in 8 years to rein in a global glut that halved prices from mid-2014 highs above $100 a barrel.

Oil rose earlier in the session after Russian Energy Minister Alexander Novak said he would make proposals to his counterpart from OPEC leader Saudi Arabia this weekend on price-supportive measures that could include an oil production freeze.A rallying dollar limited oil's advance though as greenback-denominated commodities, including oil, less affordable to holders of other currencies. (Additional reporting by Karolin Schaps in LONDON and Henning Gloystein in SINGAPORE; editing by Mark Heinrich and David Gregorio)

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Updated Date: Oct 22, 2016 00:30:06 IST