Oil slips below $44 US for 1st time in 5 months

Oil was testing fresh lows below $44 US a barrelon Friday after oilfield services company Baker Hughes revealed the number of rigs exploring for oilhas risen.

The September West Texas Intermediate contract traded in New York was at $43.87US a barrel at the close, down from $44.86 on Thursday and close to its low for the year. That low, set in March, was $43.46.

Oil prices havebeen losing ground for six straight weeks.

Western Canada Select, a Canadian oilsands contract, was at a low of $26.30 US a barrel, widening the gap between the WTI price and the Canadian oil price to more than $17.

Oil is declining amid expectations that U.S. drillers will resume activity, leading to an even larger glut of oil.

Baker Hughes reported the U.S. rig count was up by 10 this week to 884 rigs in operation, with 670 of them looking for oil (an increase of six rigs) and another 213 for natural gas.

In Canada, seven rigs were taken out of operation for a total of 208.

On Wednesday, WTI oil fell below $45 a barrel for the first time since March after the U.S. Energy Information Administration reported U.S. crude oil production rose by 52,000 barrels a day.

Although there was increased demand for gasoline from American drivers, refineries were running at 96.1 per cent leading to a build-up in gasoline inventories.