Oil extended gains above $74 a barrel as risks of a supply shortage countered signs that U.S. explorers are ramping up drilling activity.
Futures in New York climbed as much as 0.7 percent after a 1.2 percent advance on Friday. The oil industry risks a supply crunch as big companies focus on U.S. shale and short-term efforts, Amin Nasser, the head of Saudi Arabia’s state producer, told the Financial Times. Meanwhile, American drillers added working oil rigs for the first time in three weeks, according to data from Baker Hughes.
Oil rallied to a fresh three-year high last week as concerns over supply disruptions in Canada, Libya and Venezuela overshadowed a deal by the Organization of Petroleum Exporting Countries and its allies to boost output. Though Saudi Arabia increased production under mounting pressure from U.S. President Donald Trump over high prices, Iran warned oil could reach $100 if its supply is cut with the U.S. pressing allies to end imports from the Persian Gulf nation.
West Texas Intermediate crude for August delivery rose as much as 48 cents to $74.28 a barrel on the New York Mercantile Exchange and traded at $74.09 at 3:43 p.m. in Tokyo. The contract climbed 86 cents to $73.80 on Friday. Total volume traded was about 21 percent below the 100-day average.
Brent for September settlement climbed 47 cents to $77.58 a barrel on the London-based ICE Futures Europe exchange. The contract fell 28 cents on Friday. The global benchmark traded at a $5.78 premium to WTI for the same month.