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Oil prices extend gains

LONDON: Oil prices advanced further Monday with buying boosted by a dip in North American crude production, while a robust US jobs report also provided support, analysts said.

US benchmark West Texas Intermediate for delivery in March advanced $1 to $52.69 a barrel compared with Friday’s close.

Brent North Sea crude for March won 63 cents to stand at $58.43 a barrel in London afternoon trade.

Last week saw WTI surge seven percent and Brent add 9.4 percent, their best weekly gains since February 2011.

Nicholas Teo, market analyst at CMC Markets in Singapore, said the gains were “motivated by supply-side influences” in the United States.

A survey by US oil services firm Baker Hughes Inc released Friday showed the number of rigs drilling for oil in the United States fell by 83 to 1,140 in the week to February 6. The dip followed a cut of 94 rigs the previous week.

Bloomberg News reported that the rig count was standing at its lowest level since December 2011.

The drop, coupled with announcements of deep cuts in capital spending by major oil companies including BP and BG Group, suggests tighter supplies in the future.

Oil prices have plunged by about 50 percent from their June peaks, largely owing to a surge in global reserves boosted by robust US shale production.

Teo said a surprisingly robust jobs report in the United States was also supporting prices as it heralds stronger demand.

The Labor Department on Friday reported that the world’s biggest economy added 257,000 jobs in January and revised upward already healthy growth in the previous two months.

The unemployment rate edged up to 5.7 percent from 5.6 percent, but that was in part because more people were actively seeking jobs. (AFP)

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