US economy registered an increase in the number of active oil rigs in the country for an eighth consecutive week that pushed the headline number to the highest level since September 2015. The numbers of active rigs declined to the lowest point when it reached just 316 in the month of May last year. The increase in the number of rigs operating coincided with an increase in the oil production in the United States. As of March 3rd this year, the oil production has reached 9.09 million barrels per day, up 7.8 percent from its bottom in last July when the production declined to just 8.428 million barrels per day.

According to data from US Energy Information Administration (EIA), the cost has declined substantially for shale companies in the US which are now in a position to fight price below $50 per barrel. The average cost of production has declined to $40 per barrel.

Commitment of traders (COT) report released by CFTC showed that after pushing long position to a record high, speculators have reduced long positions in the past two weeks as doubts have emerged over the ability of the OPEC/N-OPEC deal to cut supplies significantly amid an increase in production in the US. OPEC and 14 non-OPEC members agreed to reduce supply by 1.8 million barrels per day in Last November.

Last week oil suffered the ugliest downside blow since last October as price declined more than 9 percent. WTI is currently trading at $48.2 per barrel and Brent at $3 per barrel premium.