|
Brent crude oil was up 10 cents a barrel at $55.33 by 1155 GMT.
U.S. light crude was down 10 cents a barrel at $52.53.
Both benchmarks have traded within fairly narrow ranges over the
last two months, since the Organization of the Petroleum
Exporting Countries agreed to cut output by almost 1.8 barrel
per day (bpd) in an attempt to clear a global glut.
After an initial price rise on hopes that markets would
rebalance quickly, Brent and U.S. crude futures have both been
held back by evidence of higher U.S. oil drilling and forecasts
of a rebound in shale production.
OPEC's oil production has fallen by more than 1 million bpd this
month, a Reuters survey showed on Tuesday, pointing to a strong
start by the exporter group in implementing its first supply cut
deal in eight years.
But U.S. shale output is slowly increasing, helping keep a lid
on prices. Brent has been close to $55 a barrel and U.S. crude
not far from $52.50 for most of January.
"OPEC adherence to production targets has been strong," said
U.S. investment bank Jefferies, but added that U.S. drilling
"activity levels are already picking up".
Following months of increased drilling, U.S. oil production
<C-OUT-T-EIA> has risen by 6.3 percent since July last year to
almost 9 million bpd, according to data from the U.S. Energy
Information Administration.
Goldman Sachs estimates that year-on-year U.S. oil "production
will rise by 290,000 bpd in 2017" if a backlog on rigs that are
still to become operational is accounted for.
The differing outlook between global oil markets and the U.S.
market has focused attention on the spread between Brent and
U.S. crude oil futures, also known as West Texas Intermediate or
WTI.
Brent's premium over U.S. crude for March is now between $2.50
and $3.00 a barrel, reflecting a tighter market as OPEC's cuts
bite and a more over-supplied U.S. as drilling increases.
The spread was closer to $1 a barrel in November, before OPEC
agreed to cut production.
"Brent is supported by OPEC cuts, (but) WTI falls due to rising
U.S. output," Commerzbank commodities analyst Carsten Fritsch
told the Reuters Global Oil Forum.
(Additional reporting by Henning Gloystein in Singapore; Editing
by Mark Potter)
[© 2017 Thomson Reuters. All rights
reserved.] Copyright 2017 Reuters. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed.
 |
|
