Oil prices go up amid reduced American drilling activity
On Monday, crude oil prices surged following indications that American shale oil producers are reducing their drilling activity. Crude futures for May delivery gained 1.62%, trading at $40.10 per barrel in New York.
Baker Hughes, an outfield services provider, last week, the total number of rigs drilling for the number one commodity in America sagged by 15. The descend follows a surge of one rig the week before, that marked the first oil-rig count soar in 2016.
Traditionally, a lower American rig count is an evident bullish sign for this commodity, because it points out to potentially lower output in the future.
Since dropping to 13-year lowest levels of $26.05 in February, American crude futures have managed to rebound by about 45%, because a decrease in American shale production drove sentiment. Financial analysts have already warned that market conditions are still because of an everlasting glut.
Last week, New York-traded crude futures fell 5.21%, the first weekly sag since February, because a spike in American crude inventories powered worries over domestic oversupply.