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Oil prices were stable on Monday as increasing U.S. rig count indicated further increases in American production, one of the few factors holding back crude in an otherwise bullish environment.
Brent crude oil futures traded at $74.07 per barrel, almost unchanged from their last settlement. U.S. WTI crude futures traded down 3 cents at $68.37 per barrel.
Drillers in the U.S. added five oil rigs drilling for new production in the week ended April 20, bringing the overall figure to 820, the highest count since March 2015, according to General Electric's Baker Hughes energy services firm.
The increasing rig number indicates further increases in U.S. crude production, which is already up a quarter since mid-2106 to a record 10.54 million bpd. Only Russia tops this figure, which produces 11 million bpd.
Despite the declines in crude oils on Monday the overall market continues to be well supported, particularly by solid demand in Asia, and Brent prices have risen by 20 percent from their 2018 lows in February.
Markets are also being supported by the production cuts led by the Organization of the Petroleum Exporting Countries that were put in place in 2017 to support the market.
According to JP Morgan Asset Management Global Market Strategist Kerry Craig, added price pressures also stems from U.S. sanctions against top exporting countries of Venezuela, Russia and Iran. This is in referral to action the U.S. has taken on Russian firms and entities, as well as on possible new measures against Venezuela and Iran. The U.S. has until May 12 to decide whether or not it will abandon the Iran nuclear deal and instead implement new punitive actions against Tehran, including potentially on its oil exports, which would further tighten global supplies.
In a separate note, U.S. bank J.P. Morgan advised clients to stay long on oil.
