Oil swung between gains and losses near the lowest closing price in almost four weeks as investors weighed a slowing pace of United States drilling-rig reductions against an interest rate cut in China.
Futures in New York rose as much as 0.5 per cent and fell as much as 0.4 per cent. The number of active machines targeting oil dropped by 1 through October 23 after declining by 45 over the prior three weeks, according to Baker Hughes. China, the world’s second-biggest crude consumer, stepped up monetary easing with its sixth interest-rate cut in a year on Friday to combat deflationary pressures and a slowing economy.
Oil is failing to sustain a rally earlier this month above $50 a barrel as surging US inventories bolstered speculation that a global glut will be prolonged. World crude supplies will remain ample until at least the middle of 2016 while investments in the industry is set to shrink further, International Energy Agency executive director Fatih Birol said in Singapore on Monday.
“The recent spate of crude-stockpile builds in the US is reinforcing that story about supply, that story about a saturated market,” Jonathan Barratt, the chief investment officer at Ayers Alliance Securities in Sydney, said by phone. “Oil has very strong headwinds to get through.”