Price of crude oil climbs in worldwide market

Oil prices rise towards $70 fueling more subsidy fears

Oil prices rise towards $70 fueling more subsidy fears

Zanganeh is not wrong, but the problem is that USA drillers have demonstrated that they could pump more at US$60 a barrel, too, so bringing prices closer to that level is not a guaranteed way to stymie USA oil production growth. US West Texas Intermediate (WTI) crude futures fell 68 cents, or 1.1 per cent, to settle at $US61.36 per barrel.

The split, apparently, stems from Saudi Arabia's insistence that crude oil should be kept closer to US$70 a barrel-a level Brent touched briefly early this year-and Iran's equal insistence that US$60 is a better place for oil to trade at.

Traders attributed the recent increase to a drop in the number of U.S. drilling rigs for production and the reported job increase in the USA which is expected to push fuel demand higher.

"The big take away is the implied annual rate of change", James Williams, energy economist at WTRG Economics, told MarketWatch.

This week's Consumer Price Index (CPI) release, given its potential impact on the dollar, could be critical, said Bill Baruch, president of Blue Line Futures in Chicago.

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That has undercut some of the enthusiasm for oil, as investors weigh increased United States supply against the likelihood that the Organization of the Petroleum Exporting Countries and non-OPEC producers will maintain supply cuts that have been in effect for more than a year. That split is driven by differing views over whether $70 a barrel sends US shale companies into a production frenzy that could cause prices to crash.

Energy services firm Baker Hughes said on Friday that energy companies last week cut oil rigs for the first time in nearly two months.

Meanwhile, data out Friday did show that hedge funds and money managers cut their bullish bets on USA crude oil for the first time in three weeks.

The oil production in the United States is not the only problem.

April natural gas bucked the downtrend among its energy peers, settling up 1.7% at $2.778 per million British thermal units, with forecasts for more cold weather in the eastern US boosting expectations for heating demand.

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