Oil Extends Advance Above $36 as U.S. Explorers Idle More Rigs

Oil extended gains above $36 a barrel as U.S. drillers cut the number of active rigs to the lowest in more than six years amid a global glut.

Futures advanced as much as 1.6 percent in New York and oil in London extended its longest run of gains since November. Rigs targeting oil fell by 8 to 392, the smallest level since December 2009, according to Baker Hughes Inc. That is the 11th week of declines. Azerbaijan will join other producers in freezing output, a proposal being led by Saudi Arabia and Russia, according to Rovnaq Abdullayev, the president of state-run Socar, ANS TV reported.

Oil is still down about 2 percent this year on speculation a surplus will be prolonged amid brimming U.S. stockpiles and the outlook for increased exports from Iran after the removal of sanctions. A meeting to discuss the freeze may be held in Russia, Doha or Vienna during the March 20 to April 1 period, Russian Energy Minister Alexander Novak said on state television Rossiya 24.

West Texas Intermediate for April delivery rose as much as 57 cents to $36.49 a barrel on the New York Mercantile Exchange and was at $36.22 at 8:13 a.m. Hong Kong time. The contract climbed $1.35 to $35.92 on Friday, the highest close since Jan. 5. Total volume traded was about 20 percent below the 100-day average. Prices capped a third weekly gain on Friday.

Brent for May Settlement increased as much as 48 cents, or 1.2 percent, to $39.20 a barrel on the London-based ICE Futures Europe exchange. The contract rose 10 percent last week. The global benchmark crude was at a premium of 97 cents to WTI for May.

To contact the reporter on this story: Ben Sharples in Hong Kong at bsharples@bloomberg.net. To contact the editors responsible for this story: Ramsey Al-Rikabi at ralrikabi@bloomberg.net, Aaron Clark, Sungwoo Park

By: Ben Sharples

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