NEW YORK, Feb. 19 (UPI) -- Crude oil prices were down sharply in Thursday trading after U.S. data showed more crude oil held in inventories, putting pressure on the recent rally.
The price for Brent, the global crude oil benchmark, fell nearly 4 percent in early Thursday trading for the April contract to $58.16 per barrel. Prices are up since a 2015 low-water mark below $50, but the recent short-term rally has been unsustainable. Brent prices are down about 6 percent for the week.
Data from the American Petroleum Institute on an increase in crude oil inventories in the United States show markets are still favoring the supply side. The steady increase in U.S. oil production, now over the 9 million barrel per day mark, helped advance the bear market for crude in June. A November decision from the Organization of Petroleum Exporting Countries to keep output static added further downward pressure on crude oil markets.
The drop in crude oil prices is forcing energy companies to spend less on exploration and production. Fewer rigs actively exploring for or producing oil or natural gas suggests the industry is slowing down as a response to the weak market.
The North Dakota Industrial Commission reported 137 active drilling rigs in service in the state Monday, a 26 percent decline from the same date in 2014 and 31.5 percent less than the historic peak reached in 2012. The rig count for Monday was the lowest in five years. State data published Thursday show the record was short-lived, with 127 rigs now in service.
API data suggest the slowdown in exploration and production isn't reflected in real terms. North Dakota figures from December, the last full month for which data are available, show oil production at an all-time high of around 1.2 million bpd.
The price for West Texas Intermediate crude oil, the U.S. benchmark, fell 5 percent from the previous close to trade at $49.50 for March delivery.
