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MTECHTIPS:-Oil down on concerns rising U.S. production could dampen output cut deal

Tuesday, January 10, 2017 2:02
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MTECHTIPS:-Oil down on concerns rising U.S. production could dampen output cut deal

 

MTECHTIPS-  Oil fell more than 2 percent on Monday as signs of growing U.S. production outweighed optimism that many other producers, including Russia, were sticking to a deal to cut supplies in a bid to bolster the market. Brent crude futures (LCOc1) were down $1.30, or 2.3 percent, at $55.80 a barrel at 1414 GMT (9:14 a.m. ET), after touching a intra-day low of $55.69. U.S. crude futures (CLc1) were trading at $52.73 per barrel, down $1.26, or 2.3 percent, compared with a session low of $52.64. “We see the optimism surrounding OPEC and non-OPEC production cuts being counterbalanced by fears of higher U.S. crude production as the higher rig count of last Friday still weighs,” said Hans van Cleef, senior energy economist at ABN Amro. Last week, U.S. energy companies added oil rigs for a 10th week in a row to 529, Baker Hughes data showed, extending a recovery in activity into an eighth month. Analysts at Barclays (LON:BARC) said they expected the U.S. rig count to rise to 850-875 by the end of the year. This raised concerns that U.S. production is increasing and undermining efforts by the Organization of the Petroleum Exporting Countries (OPEC) and others to cut output. In Iraq, OPEC’s second-biggest producer, oil exports from the southern Basra ports reached a record high of 3.51 million barrels per day (bpd) in December, the oil ministry said. Although Iraq’s oil minister added the country would still comply with an agreed output cut of 210,000 bpd from January

 

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