Oil traded at an almost two-month high in London amid speculation that a slowdown in U.S. drilling may curb production.
Brent crude futures were little changed in London, paring an earlier increase of as much as 1.7 percent. U.S. drillers cut the number of rigs in service by 84 to 1,056, the lowest since August 2011, data from Baker Hughes Inc. show. Still, the decline isn't steep enough to sufficiently curb production and address the current excess, according to Goldman Sachs Group Inc. Libya's National Oil Corp. said it would stop pumping crude at all its fields if attacks continue.
The U.S. is pumping oil at the fastest pace in three decades as a combination of horizontal drilling and hydraulic fracturing unlocks supplies from shale formations including the Permian and Eagle Ford in Texas and the Bakken in North Dakota.