Investing.com – Crude oil prices settled lower as data showed the number of US oil rigs surged to a 34 month high, stoking investor fears for a ramp up in domestic production.
On the New York Mercantile Exchange crude futures for March delivery fell 3.19% cents to settle at $59.20 a barrel, while on London's Intercontinental Exchange, Brent lost 3.56% to trade at $62.50 a barrel.
The number of oil rigs operating in the US rose by 26 to 791, the highest level since April 2, 2015, according to data from energy services firm Baker Hughes.
That deepened investor fears that rising US oil output would offset major oil producers’ efforts – as part of the production-cut agreement – to rid the market of excess oil stockpiles.
The rise in US oil rigs comes just two days after the Energy Information Administration released Wednesday its weekly inventory totals showing both US crude and output rose.
Inventories of U.S. crude rose 1.895 million barrels for the week ended Feb. 2, below expectations for for a rise of 3.189 million barrels, the Energy Information Administration said Wednesday.
The build in crude this week comes amid a slowdown in refinery activity as refiners entered a period of maintenance, which typically lessens demand for crude oil.
EIA's preliminary figures on Wednesday showed weekly U.S. production hit 10.25 million barrels a day. That level brings the US closer to world's top producers Saudi Arabia and Russia.