MTECHTIPS;-Oil firms on OPEC-led production cuts, but rising U.S.
MTECHTIPS;-Oil firms on OPEC-led production cuts, but rising U.S. output caps gains
MTECHTIPS-Oil prices firmed on Friday as rising crude output from the United States was offsetting efforts by OPEC and other producers to prop up the market by cutting supplies. Brent crude futures (LCOc1), the international benchmark for oil prices, were trading at $56.41 per barrel at 0753 GMT, up 17 cents from their last close. U.S. West Texas Intermediate (WTI) crude futures (CLc1) were at $53.99 a barrel, up 21 cents. Trading activity during Asian business hours was low due to the start of the Lunar New Year holiday in most countries of the region, including China and Singapore. Traders said prices were lifted by production cuts led by the Organization of the Petroleum Exporting Countries (OPEC) and other producers including Russia, aimed at reducing a global fuel overhang. However, they added that rising output in the United States was partially offsetting those efforts. “U.S. producer hedging via futures and increasing shale production offset the progress OPEC has made with its production cut implementation,” said Jeffrey Halley, senior market analyst at futures brokerage OANDA in Singapore. “Market participants are hyper-focused on two issues: shale’s response to higher prices and OPEC compliance,” Barclays (LON:BARC) bank said. “Producers and OPEC countries are all talking their books, yet the jury is still out,” it added, referring to widespread scepticism over compliance with announced cuts.