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Oil prices, rig counts drift lower

Baker Hughes shows rig count falling across the board.

By Daniel J. Graeber

NEW YORK, April 17 (UPI) -- A decline in rig activity in the United States wasn't enough to stimulate oil markets responding to an increase in OPEC oil production.

Crude oil prices fell from an early Thursday surge on word that members of the Organization of Petroleum Exporting Countries increased production by 810,000 barrels per day, with Iraq and Saudi Arabia adding most to the gains.

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Brent crude oil prices pulled away from $64 per barrel early in Friday trading, off a fraction of a percent to $63.85 for the May contract.

OPEC gains overshadowed concerns about simmering conflict in Yemen and lingering terrorism concerns in Iraq. Supply and demand mechanisms have been major contributors to oil price swings in recent sessions.

Brent crude oil prices are up 14.5 percent since the start of April, but still far below June levels above the $100 per barrel mark. The bear market for crude has forced most energy companies to cut back on spending in exploration and production.

Oil services company Baker Hughes said Friday the number of rigs in service worldwide fell by about 1.8 percent from March to 1,251 for the week ending April 10. In the United States, the rig count is down nearly 4 percent to 988.

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A report Thursday from the Dallas Federal Reserve said rig activity in the No. 1 oil producer in the United States was on the decline. This week, oil field services company Schlumberger said it was laying off 11,000 workers in an effort to save cash in weakened oil market.

West Texas Intermediate, the U.S. benchmark, was off nearly a full percent in early Friday trading to sell for $56.18 per barrel. WTI is up about 14.7 percent since the start of April.

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