Crude retreats from Friday's surge, as shale production remains flat Crude futures edged down on Monday, one session after soaring amid dwindling U.S. rig counts as investors locked into profits from a surge at the end of trading last week. Energy traders also digested further indication of slowing U.S. production, as output among the nation's most productive shale formation remained flat last month. On the New York Mercantile Exchange, WTI crude for July delivery fell 0.07 or 0.12% to $60.23 a barrel. On Friday, WTI crude surged more than 4.5% to close above $60 a barrel for the first time in nearly two weeks. On the Intercontinental Exchange (ICE), brent crude for July delivery dipped 0.57 or 0.87% to $64.99. Brent also soared last Friday, gaining 4.76% to near $66 a barrel. Brent wavered between a session-low of $64.26 and a high of $65.75 on a choppy day of trading. Meanwhile, the spread between the international and U.S. benchmarks of crude stood at 4.76, down from Friday's level of 5.23. On Friday, oil services firm Baker Hughes (NYSE:BHI) said the number of oil rigs in the U.S. last week dropped by 13 to 646, the lowest level since August, 2010. A week earlier, the U.S. rig count fell by one to 659 marking the slowest rate decline over the last 24 weeks. Nevertheless, the rig count is still down drastically after peaking above 1,600 last fall. The dwindling rig count provides some signals that the glut of oversupply in the global market may be on the verge of significant reduction. Last Thursday, the Energy Information Administration (EIA) said that U.S. crude stockpiles decreased by 2.8 million barrels for the week that ended May 22, marking the fourth consecutive week of weekly declines. Crude futures are down more than 10% since OPEC rattled markets with its decision to keep production levels constant. Energy traders await a key OPEC meeting in Vienna on Friday for further indications of supply levels in the market. OPEC is widely expected to keep production steady at over 30 million barrels per day. As U.S. crude stockpiles dangerously neared full storage capacity earlier this spring, industry observers kept a close eye on production levels at shale fields throughout the nation. Last week, U.S. crude production increased to 9.566 million. barrels per day up from a total of 9.262 for the week ending May 15. While concerns of oversupply have waned slightly, shale production remained virtually unchanged in April. At the Bakken formation in Western North Dakota, shale production increased by a modest 2,000 barrels per day in April according to figures from Bentek Energy, while production at the Eagle Ford formation in Southern Texas rose by a mere 1,000 bpd. The U.S. Dollar Index, which measures the strength of the greenback versus a basket of six other major currencies, surged to an intraday high of 97.76, nearing its highest level in five weeks.
