Oil steady near multiyear highs as US rig count rises

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The data adds to a healthy picture of global oil production, following last week's increase in USA oil rigs to 844, the highest number in three years.

The oil prices has become steady at $71 as OPEC signaled that it has the ability to fill in the supply gap only if USA sanctions are curtailed from shipments from Iran, which is the third largest producer of this group.

Three members of the Organization of Petroleum Exporting Countries - Saudi Arabia, Kuwait and the United Arab Emirates - together have enough capacity to act as a cushion the U.A.E. energy minister said.

The news of President Donald Trump's decision to pull the USA out of the Iran nuclear deal sent oil prices surging, reaching a four-year-high due to the uncertainty that comes with the sanctions that may be reimposed on Iran. Investors are now weighing signals from OPEC and its allies to see whether they will end a deal to cut production aimed at shrinking a glut, or seek an extension to further prop up prices.

Falling costs and increasing efficiency, coupled with lower well costs as producers became more efficient at recovery in shale oil wells, drove a 40% drop in average West Texas Intermediate breakeven pricing for USA tight oil.

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Even so, crude oil prices are inching higher, adding to multi-year highs; WTI now +0.1% at $70.79/bbl, Brent +0.4% at $77.42/bbl.

Brent for July settlement advanced 36 cents to $77.48 a barrel on the London-based ICE Futures Europe exchange, after declining 0.5 percent on Friday.

The report also presented the country's average heavy oil price to be $66.56 in April, a $4.41 or 7.1 percent rise from $62.15 in March.

Improving conditions for shale-derived oil and gas pushed total USA capacity past the 10m bbl/day mark in November last year, with the country expected to account for 1.5m bbl/day of the projected 1.7 m bbl/day supply growth from non-OPEC producers this year. Tight and shale formations are expected to average 5.76 million barrels a day, accounting for 94% of total USA petroleum supply in 2018, according to OPEC.

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