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An oil tanker is seen on Lake Maracaibo in Venezuela's western state of Zulia March 1, 2008. REUTERS/Jorge Silva
An oil tanker is seen on Lake Maracaibo in Venezuela's western state of Zulia March 1, 2008. REUTERS/Jorge Silva

U.S. crude prices head towards new 2015 low as drilling rebounds

SINGAPORE – U.S. crude oil prices dipped in early Asian trading on Monday, heading towards last week’s 2015 lows as a rebound in drilling activity, a strong dollar and brimming storage facilities weighed on prices.

U.S. West Texas Intermediate (WI) crude futures <CLc1> were trading at $34.48 per barrel at 0008 GMT, down 25 cents from their last settlement and close to last Friday’s 2015 lows. Oil prices are at levels last seen during the peak of the financial crisis of 2008/2009.

Analysts said a strong dollar following last week’s U.S. interest rate hike, which makes oil consumption more expensive for countries using different currencies, as well as a renewed increase in U.S. oil rig counts were weighing on crude prices.

“The U.S. oil rig count bounced back this week, up by 17 (to 541), putting an end to four consecutive weekly declines,” Goldman Sachs said.

“The increase in rig count even in a low crude oil price environment suggests shale producers are committed to maintaining production levels. The resilient production data reflect rising U.S. crude stockpiles, which have surged to 491 million barrels, the most for this time of year since 1930,” ANZ bank said.

The glut in the U.S. oil market adds to global oversupply as the main producers, including the Organization of the Petroleum Exporting Countries (OPEC) and Russia, pump hundreds of thousands of crude every day in excess of demand.

Internationally traded Brent crude futures <LCOc1> were down 34 cents at $36.54 per barrel, down more than two-thirds since June 2014 when the price rout began.

The global glut means that the lifting of a decades-old ban on U.S. crude exports that was announced last week is expected to have little immediate impact on oil flows and prices.

In related news, groups appeal suspension of federal oil, gas drilling rules.

(Editing by Richard Pullin)

This article was written by Henning Gloystein from Reuters and was legally licensed through the NewsCred publisher network.