LAGOS — Oil eased  toward $66 a barrel, yesterday, after reaching a 2015 high, as ample current supplies and weak Chinese factory activity countered expectations of a tighter supply and demand balance later this year.

The collapse of oil prices in 2014 has prompted expectations that supply growth in higher-cost crude producers such as the United States will slow. On Friday, oil services firm Baker Hughes Inc. said the number of U.S. active rigs had fallen for a record 21 weeks in a row.

US oil production falling

The meteoric rise in U.S. shale oil production has ended, easing a global glut and driving a rebound in crude prices from below $50 a barrel, according to crude trader and hedge fund manager Andrew J. Hall.

“We have now reached a turning point,” Hall said in a letter weekend to investors in Astenbeck Capital Management LLC, his commodities hedge fund. Growing demand and supply pullbacks “rendered all the doomsday forecasts self-defeating.”

Oil production from Texas to North Dakota peaked at almost 10 million barrels a day in February and has been falling since then, Hall wrote. A drastic reduction in drilling rigs is starting to shrink U.S. oil output, according to government data cited by Hall.

That’s helped drive a 36 per cent rally in the past six weeks, and prices will continue to rise because it will be harder for producers to ramp up than it was to cut back, Hall said in his letter.

Lower crude prices have also boosted demand, while the risk of supply disruptions across the Middle East is growing amid sectarian tensions. West Texas Intermediate, the U.S. benchmark crude, settled at $59.15 a barrel Friday, marking a 3.5 per cent rise for the week. It fell 33 cents yesterday to $58.82 a barrel.