Oil headed for the biggest weekly decline since March, as a rebound in United States drilling added to signs that producers will pump into an oversupplied market.
Futures in New York fell for a third day and were down 5 percent for the week. The number of active rigs seeking oil climbed by 12 to 640, the first gain since December, according to data from Baker Hughes Inc. US crude stockpiles increased by 2.39 million barrels through June 26, a government report showed on Wednesday, boosting supplies further above seasonal average levels.
Oil’s recovery from a six-year low in March has faltered amid speculation that rising prices will spur production and prolong a surplus. The Organizations of the Petroleum Exporting Countries’s output expanded last month to the highest level since August 2012, as Iraq joined Saudi Arabia in pumping at a record pace, a Bloomberg survey showed this week.
“It’s all about the glut,” Jonathan Barratt, the chief investment officer at Ayers Alliance Securities in Sydney, said by phone. “We’re not seeing as much demand as we wanted. Oil will continue to come under pressure, there is no real reason for it to go higher.”