Oil slips from 16-month high as US boosts rigs after OPEC pact

Oil retreated from the highest close in sixteen months as US producers boosted the number of rigs drilling for crude to the most since January after Organisation of Petroleum Exporting Countries (OPEC) approved its first supply cut in eight years. Futures fell as much as 1 per cent in New York, after closing at the highest since July 2015 on Friday. US oil explorers expanded the number of rigs in action by 3 to 477, the highest since January 29, Baker Hughes Inc. said Friday. OPEC’s three largest producers - Saudi Arabia, Iraq and Iran - overcame discord to reach Wednesday’s pact to reduce the group’s output by 1.2 million barrels a day, while Russia pledged a cut of as much as 300,000. The OPEC set a collective output target at the lower end of the range outlined two months ago in Algiers, boosting prices and prompting predictions of a possible advance to $60 a barrel from Goldman Sachs Group Inc. and Morgan Stanley. Some analysts warned the rally may encourage higher output from producers outside the group, including shale drillers in the US. (Stephen Stapczynski/Bloomberg)