Brent oil up with sharp decline in US oil rig count

ANKARA

The price of Brent crude oil was up to start Monday with gains with the sharp decline in the number of active oil rigs in the U.S., triggering the possibility that the glut of supply could decrease.

The international benchmark was trading at $26.97 per barrel at 0605 GMT on Monday for an 8.2% increase after it closed Friday at $24.93 a barrel.

American benchmark West Texas Intermediate (WTI), however, was trading at $20.80 a barrel at the same time for a 3.3% decline after ending Friday at $21.51 per barrel.

The number of oil rigs in the U.S., which indicates short-term production in the country, fell by 40 to reach 624 for the week ending March 27, from 664 the previous week, according to data by oilfield services company Baker Hughes on Friday.

The sudden decline in the oil rig count suggests that crude oil production in the U.S. can decline in the following weeks to help to trim some of the oversupplies in the global oil market.

On the demand side, the number of rising novel coronavirus (Covid-19) cases around the world continues to weaken oil consumption and global crude demand.

The number of Covid-19 cases in the world stood at 720,117 with more than 33,900 deaths as of Sunday, according to data from Johns Hopkins University.

As of Sunday evening, at least 2,460 people have died in the U.S., the world's biggest economy, and the number of infections has risen to 140,886 in the country.

U.S. President Donald Trump said Sunday that the death rate in his country from Covid-19 would likely hit a peak in two weeks.

"The modeling estimates that the peak in death rate is likely to hit in two weeks ... It should start coming down, and hopefully very substantially, from that point," Trump said at a press conference at the White House.

On the supply side, crude oil inventories are rising due to coronavirus-related low oil consumption, and creating another pressure on crude prices.

Global crude oil stocks are set to increase further after Saudi Arabia, Russia and the United Arab Emirates announced earlier this month that they are planning to ramp up their crude oil production levels starting from April.