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Oil ticks down ahead of OPEC report

Published 02/13/2017, 04:10 AM
© Reuters.  Oil starts the week lower

Investing.com - Oil prices edged lower during European morning hours on Monday, as investors await a monthly report from the Organization of Petroleum Exporting Counties for further evidence that crude producers are adhering to planned output cuts.

Crude oil for March delivery on the New York Mercantile Exchange shed 45 cents, or around 0.9%, to $53.41 a barrel by 4:10AM ET (09:10GMT).

Elsewhere, Brent oil for April delivery on the ICE Futures Exchange in London slipped 49 cents, or about 0.9%, to $56.20 a barrel.

OPEC is scheduled to publish its first assessment of its January production in its monthly oil market report later on Monday.

Oil prices rallied on Friday on reports that OPEC has delivered more than 90% of pledged oil output curbs in January, making a strong start to implementation of its first production cut in eight years.

January 1 marked the official start of the deal agreed by OPEC and non-OPEC member countries such as Russia in November last year to reduce output by a combined 1.8 million barrels per day to 32.5 million for the next six months.

The deal, if carried out as planned, should reduce global supply by about 2%.

Futures have been trading in a narrow range around the low-to-mid-$50s over the past month as sentiment in oil markets has been torn between hopes that oversupply may be curbed by output cuts announced by major global producers and expectations of a rebound in U.S. shale production.

Oilfield services provider Baker Hughes said Friday that the number of rigs drilling for oil in the U.S. increased by 8 last week, the 14th gain in 15 weeks.

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That brought the total count to 591, the most since October 2015.

The data raised concerns that the ongoing rebound in U.S. shale production could derail efforts by other major producers to rebalance global oil supply and demand.

Elsewhere on Nymex, gasoline futures for March dropped 2.1 cents, or 1.3%, to $1.567 a gallon, while March heating oil fell 1.5 cents ,or 1%, to $1.650 a gallon.

Natural gas futures for March delivery slumped 5.6 cents, or 1.9%, to $2.977 per million British thermal units, the lowest in 12 weeks, as forecasts showing cold weather receding in key regions in the U.S. during the next few weeks dampened demand for the heating fuel.

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