Crude price gained mildly in Asia on Monday with the market looking ahead to an update on February crude output as early as this week and new demand figures later in the month from the International Energy Agency.
U.S. West Texas Intermediate crude for April rose 0.22% to $54.11 a barrel. On the ICE Futures Exchange in London, Brent oil for April delivery gained 0.28% to $56.47 a barrel.
Ahead this week, markets will focus on Trump’s address to Congress on Tuesday for further details on his promises of tax reform, deregulation and infrastructure spending as well as a handful of Fed appearances, most importantly Fed Chair Janet Yellen on Friday. Investing.com’s Fed Rate Monitor Tool still sees a low chance for a Fed rate hike in March, though investors are showing caution.
As well, fresh weekly information on U.S. stockpiles of crude and refined products on Tuesday and Wednesday to gauge the strength of demand in the world’s largest oil consumer.
Last week, oil futures ended lower on Friday, moving further away from the strongest level since January as concerns over rising production and swelling stockpiles in the U.S. offset optimism that OPEC and its allies have been following through on their commitment to cut production.
Concerns that the ongoing rebound in U.S. shale production could derail efforts by other major producers to rebalance global oil supply and demand pressured crude prices.
Data from oilfield services provider Baker Hughes on Friday revealed that the number of active U.S. rigs drilling for oil rose by five last week, the sixth weekly increase in a row. That brought the total count to 602, the most since October 2015.
Meanwhile, the U.S. Energy Information Administration said on Thursday that crude supplies rose by 564,000 barrels last week to yet another all-time high, feeding concerns about a global glut.
Oil prices have been trading in a narrow $5 range around the mid-$50s over the past two months as sentiment in oil markets has been torn between hopes that oversupply may be curbed by output cuts announced by major global producers and expectations of a rebound in U.S. shale production.
OPEC and non-OPEC countries have made a strong start to lowering their oil output by almost 1.8 million barrels per day by the end of June, with compliance currently at around 90%.
OPEC could extend its oil supply-reduction pact with non-members or even apply deeper cuts from July if global crude inventories fail to drop to a targeted level, OPEC sources said earlier this month.
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