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Oil Prices Retreat as Drilling Activity in U.S. Rises

Oil prices edge down, weighed by the rising U.S. drilling activity and stable supplies from OPEC nations despite touted output cuts designed to help ease the markets' oversupply.

Brent crude futures prices fell 29 cents or 0.56 percent from their last close at $51.47 per barrel. Meanwhile, prices for U.S. WTI crude futures slid 38 cents or 0.78 percent at $48.40 per barrel.

According to traders, the rising U.S. drilling and the still high supplies by OPEC despite its pledge to lower production pressured prices. U.S. crude drillers added 14 new oil rigs during the last week, bringing the total rig number to 631. As a consequence, U.S. oil output has climbed to more than 9.1 million bpd from 8.5 million bpd in June 2016.

Financial oil traders reduced their net long in U.S. crude futures in options in the week to March 14 in reaction to the ongoing oversupply in the markets, CFTC stated last week.

On the other hand, some analysts believe that markets will begin to tighten soon, stating that the impact of the OPEC-led cuts will only start to gain traction beginning April.

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