 Oil ticks up after 3-day decline, Russian output cuts stall
Reuters - 3/3/2017 9:04:51 AM
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U.S. crude oil rose on Friday as the market took a breather after three days of decline, but prices are being anchored by Russia's output remaining unchanged in February, indicating weak compliance on a global deal to cut supplies.
U.S. West Texas Intermediate (WTI) futures CLc1 gained 10 cents, or 0.2 percent, to $52.71 a barrel by 0039 GMT (7.39 p.m. ET) after dropping to its lowest since Feb. 9 in the last session. The benchmark Brent crude futures LCOc1 were yet to start trading after falling 2.3 percent on Thursday.
Russia's February oil output was unchanged from January at 11.11 million barrels per day (bpd), energy ministry data showed, with cuts remaining at 100,000 bpd or just a third of the levels pledged by Moscow under the agreement with the Organization of the Petroleum Exporting Countries.
There was additional pressure from rising dollar.
"Crude oil fell to a three-week low as the stronger U.S. dollar combined with concerns about rising U.S. crude oil inventories to reduce investor appetite," ANZ said in a note.
The dollar rose to a seven week high against a basket of currencies on Thursday, after hawkish comments by a Federal Reserve official late on Wednesday encouraged investors to expect a near-term interest rate hike. [USD/]
Official data showed crude inventories in the United States, the world's biggest oil consumer, rose for an eighth straight week to a record 520.2 million barrels last week. <EIA/S>
Oil prices, however, have been unusually stable since producers agreed in November to reduce the oversupply that has weighed on prices for more than two years, with both Brent and U.S. crude locked in $5 ranges.
Even as oil production rises in the United States, OPEC has boosted already strong compliance with the group's six-month deal that began in January to around 94 percent, after it cut output for a second month in February, a Reuters survey found.
Russian Energy Minister Alexander Novak said it was too early to say if the deal to reduce oil production would be extended beyond the end of June. OPEC, Russia and others are due to agree on output policy in the next three months.
Demand for gasoline in the United States, which accounts for a tenth of global oil consumption, is expected to peak next year as engines become more efficient, WoodMackenzie analysts said.
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