SINGAPORE- Oil prices edged up on Wednesday, lifted by a small supply cut by crude exporter Saudi Arabia, but markets remained under pressure from signs that the planned OPEC output reductions were being poorly implemented and as supplies from elsewhere rose.
Prices for Brent crude futures the international benchmark for oil prices, were trading at $53.77 per barrel, up 13 cents from their last close.
U.S. West Texas Intermediate (WTI) crude oil futures were at $50.96 a barrel, 14 cents above their last settlement.
Traders said that the price rises were a result of Saudi Arabia, the world’s top oil exporter, telling at least one Asian refiner that it will curb crude supplies slightly from contracted volumes in February.
Despite this, there were doubts that the cuts would be deep enough to rebalance a market suffering from oversupply for the past two years. Both Brent and WTI futures are down around 6 percent since the start of the year.
“Traders continued to fret about rising U.S. supply and compliance by OPEC to agreed-upon production cuts,” ANZ bank said.
The U.S. Energy Information Administration (EIA) said on Tuesday that American crude production would rise by 110,000 barrels per day (bpd) to 9 million bpd between 2016 and 2017.
Another concern for traders were high U.S. crude stockpiles, with the EIA scheduled to release its latest figures on Wednesday.
“With inventories at the highest seasonal level in three decades, another increase in this week’s report could see prices come under further pressure,” ANZ said.
Outside the United States, there were lingering doubts over compliance with planned production cuts from members of the Organization of the Petroleum Exporting Countries (OPEC). – Reuters