Oil Steady; Record High Russian Output Forecast Offsets Weak Dollar
Brent futures were up 5 cents, or 0.1 percent, at $55.91 a barrel by 11:26 a.m. EST (1626 GMT), while U.S. West Texas Intermediate crude rose 32 cents, or 0.6 percent, to $52.69. Both contracts were up by $1 earlier Tuesday.
Earlier gains were capped by forecasts for rising U.S. and Russian production and scepticism that the Organization of the Petroleum Exporting Countries (OPEC) as a whole would comply with its commitment to reduce supplies.
Russian oil production is expected to reach another post-Soviet record high in 2017 after a global deal to cut output expires at the end of June, according to a Reuters poll of analysts.
"Strong and rising production out of Libya, Iran, Iraq and Nigeria will be acting to negate impact of OPEC/Russia output curtailments," Jim Ritterbusch, president of Chicago-based energy advisory firm Ritterbusch & Associates, said in a note.
Ritterbusch also noted that U.S. production was also on the upswing with last week's reported upside acceleration likely to be sustained to about 9.2 million barrels per day by the end of the quarter.
Traders said that oil drew some support earlier Tuesday from top crude exporter Saudi Arabia, which said it would adhere strictly to its commitment to cut output under the agreement between OPEC and other producers, such as Russia.
Under the agreement, OPEC, Russia and other non-OPEC producers have pledged to cut oil output by nearly 1.8 million bpd, initially for six months, to bring supplies back in line with consumption.
Oil exports from Iraq's southern terminals have fallen so far in January, according to loading data and an industry source, a sign that OPEC's second-largest producer is following through on the group's decision to cut output.
The dollar, meanwhile, fell by 0.7 percent against a basket of currencies after U.S. President-elect Donald Trump said that the strong greenback was hurting U.S. competitiveness.
A weaker greenback makes dollar-denominated crude less expensive for users of other currencies.
Stockpiles at the U.S. delivery hub for crude futures in Cushing, Oklahoma, which the government said declined about 580,000 barrels in the week to Jan. 6, fell about 756,000 barrels in the week to Jan. 13, according to traders, citing energy monitoring service Genscape.