Oil prices rose on Monday as the number of U.S. rigs fell for a sixth straight week, while investors waited for Chinese trade data to be published later this week for clues on demand at the world’s top energy consumer.
U.S. West Texas Intermediate (WTI) crude futures CLc1 were trading at $50.09 per barrel at 0442 GMT, up 46 cents from their last settlement. Internationally traded Brent futures LCOc1 were up 43 cents at $53.08 a barrel.
U.S. drillers removed nine oil rigs in the week ended Oct. 9, bringing the total rig count down to 605, oil services company Baker Hughes Inc (BHI.N) said late on Friday. That total was the least since July, 2010. Drillers had cut a total of 61 rigs over the prior five weeks.
Since hitting an all-time high of 1,609 during this week a year ago, weekly rig count reductions have averaged 20.
“The current rig count is pointing to U.S. production declining sequentially between 2Q15 and 4Q15 by 255,000 barrels per day,” Goldman Sachs said in response to the data.
The bank, however, added that “a rapid drawdown of the observed backlog of uncompleted wells could lead to higher production later this year and in 2016”.
The slowing U.S. drilling activity has pushed up WTI crude prices about 11 percent this month or almost 30 percent above their most recent low-point in August, although they remain 20 percent below their 2015 highs reached in May.
“Another fall in the U.S. oil rig count helped support WTI price (but) the focus will be on the release of China’s trade data, which will indicate whether low prices have kept import demand high,” ANZ bank said.
Upcoming Chinese data is likely to point to further weakness in the world’s No.2 economy, starting with import and export numbers to be published on Tuesday, with some investors fearing an economic hard-landing that could jeopardize an increasingly fragile international outlook.
As of now, oil is drawing support from a weaker U.S. dollar, which makes purchases cheaper for holders of other currencies.
The dollar hovered near a three-week low versus a basket of major currencies .DXY, anchored by doubts the U.S. Federal Reserve will raise interest rates by year-end.
“We would not be surprised to see additional upside from here (in oil prices) if recent themes persist. However, upside is likely limited, and we continue to see a range-bound market through year-end,” Morgan Stanley said.
(Editing by Himani Sarkar)