Crude Oil In Dead Zone Near $53 Despite OPEC News

Labourers work at a refinery in Jingmen in central China's Hubei province

Labourers work at a refinery in Jingmen in central China's Hubei province

Meanwhile, OPEC members are complying with supply quotas as part of an historic deal with Russian Federation to trim supplies.

However, "the longer-term story remains more favorable, and it will be many, many months before meaningful volumes of new US gas production influences the story", he said. The Organization of the Petroleum Exporting Countries has "outperformed its compliance track record, while non-OPEC [countries have] only cut about half of proposed cuts". Permian production could account for most of the gains in US shale oil production, which has in general proven more resilient to lower crude oil prices than initially expected.

Benchmark crude futures eased to settle just higher in the US on Thursday with attention growing on a possible extension of a six-month deal by OPEC and major producers to trim supplies and as investors await the latest on the supply response data from with USA rig count figures at the end of the week.

US crude inventories soared by over 9 million barrels last week.

Nigeria's problems with production are linked to attacks on installations by militants in the Niger Delta region. The U.S. market will be closed on Monday for the Presidents Day holiday. This news seemed to offset any bullish news from OPEC regarding increasing compliance with its plan to reduce output.

"The U.S. witnessed yet another week of higher-than-expected stock builds; nonetheless, the (crude) build was less than last week's, which helped prices recoup some of the earlier losses", said Abhishek Kumar, senior energy analyst at Interfax Energy's Global Gas Analytics in London.

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In addition, the threat of rising USA production continues to lower the physiological impact of OPEC's production cuts. USA gasoline cracks slid to a one-year low on Friday on fears of excess supply and weakening demand growth.

"It is hard to foresee the US shale recovery coming off the rails, much to the chagrin of OPEC", he said in an emailed report.

This news was reported by the Energy Information Administration on Wednesday. The U.S., as a whole, produces just shy of 9 million b/d.

In India and China, fuel demand declined last month while in Europe, OPEC has significantly reduced their supply.

As its largest producer, Saudi Arabia is the de facto leader of OPEC. "It's encouraging that it may not be a six-month deal but one of the issues is if you look at OPEC and other members basically reducing their supply and U.S. shale producers profiting from it, that's going to produce some turmoil", said Mark Watkins, regional investment manager at U.S. Bank Private Client Group.