Crude Oil Plunges After Increases in U.S. Drilling Rigs and OPEC Output

Crude oil futures tumbled on Monday after U.S. data showed a rise in domestic drilling while a Reuters survey indicated an increase in OPEC output last month.

Contracts of Brent crude for December delivery on the ICE Futures Exchange in London dropped 2.15 percent to trade at $55.59 per barrel – the lowest level since September 20th. Crude oil prices reversed lower after having notched a third-quarter gain of about 20 percent, which is the biggest third-quarter increase since 2004.

Baker Hughes on Friday reported that the number of active U.S. rigs drilling for oil rose by 6 to 750 last week, which marked the first increase in the last seven weeks.

Meanwhile, a Reuters survey released on Friday showed the Organization of Petroleum Exporting Countries boosted output in September. The increase largely came from higher supplies from Iraq and Libya – an OPEC member exempt from cutting output.

Trade suggestion

Sell Stop at 55.590, Take profit at 54.990, Stop loss at 55.640

 

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