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Oil and gas drilling activity continues to be cut back with explorers idling rigs for the 10th straight week a move that is seen as bullish for crude prices.
The rig count fell by 84 to 1056 last week the lowest since August 2011.
This comes as Houston-based Apache Corporation (NYSE:APA) one of the biggest operators in the Permian Basin in Texas cuts its drill rigs by 70% while French supermajor Total reduced its exploration budget by 30% to less than US$1.9 billion.
Crude production is expected to be impacted by the fall in drilling activity which is linked with production growth.
However this has yet to be reflected in U.S. production with the Energy Information Administration forecast production will increase 7.8% to 9.3 million barrels a day this year.
Further impacts on production include weather delays that may reduce shipments from Iraqi ports by 1 million barrels a day this month and a fall in Libyan crude output by 150000 barrels a day to 300000 in January.
The West Texas Intermediate for March delivery gained 30 cents to US$53.08 a barrel in electronic trading on the New York Mercantile Exchange.
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