Oil prices turn lower despite North American rig count decline

April 2 (UPI) — Crude oil prices turned lower in a Monday trading muted by an extended Easter holiday as Middle East gains offset a dip in North American rig counts.

Most European banks are on extended holiday Monday following the Easter weekend. U.S. markets were closed Friday because of the holiday.

On Thursday, Baker Hughes reported a drop in North American exploration and production. Given as rig counts, the data could be an indication of future production from the United States, and the decline comes as traders fret over steady gains that could position the country as the world’s leading producer by the end of the year.

That could offset efforts from the Organization of Petroleum Exporting Countries to drain the surplus from the five-year average in global crude oil inventories through coordinated production declines.

“Globally, even with increases in U.S. oil production, the overall decline rate of oil production has fallen by 4 percent,” Phil Flynn, the senior market analyst for the PRICE Futures Group in Chicago, said in market commentary emailed to UPI.

The price for crude oil was up for most of the overnight session in response to the decline in rig counts, but turned lower ahead of the opening bell in New York. The price for Brent crude oil was down 0.56 percent to $68.95 per barrel as of 9:15 a.m. EST. West Texas Intermediate, the U.S. benchmark for the price of oil, was down 0.85 percent to $64.39 per barrel.

The declines may be attributed to gains from Middle East producers. Iraq reported its export level from March was slightly higher than the previous month. During the weekend, Bahrain’s government said there was an oil discovery made off its coast that would “dwarf” its current total reserves.

Broader markets are reacting to escalating trade tensions between the United States and China. The Chinese Ministry of Commerce said Monday that Washington was called on to revoke trade restrictions it said violated rules from the World Trade Organization.

“China’s interests were seriously damaged,” the ministry stated through the official Xinhua News Agency.

That statement followed a decision from Beijing to respond to U.S. tariffs in a tit-for-tat move on more than a hundred U.S. goods.

Meanwhile, the U.S. economy will get another indication of momentum later in the trading day with data on construction spending for February. January levels were up 10 percent year-over-year.