OIL PRICES: ABOVE $55 YET
REUTERS - Oil prices extended declines on Monday, dragged down by signs of growing production in the United States that could partly offset output cuts by OPEC and other producers.
Uncertainty over the outlook for U.S policy also broadly weighed on financial markets after President Donald Trump introduced immigration curbs that sparked criticism at home and abroad.
But oil trading was quiet with several Asian countries, including China, on holiday for the Lunar New Year.
London Brent crude for March delivery had dropped 28 cents to $55.24 a barrel by 0657 GMT, after settling down 72 cents on Friday.
NYMEX crude for March delivery was down 23 cents at $52.90 a barrel.
The U.S. weekly oil and gas rig count from Baker Hughes showed that U.S. drillers added 15 oil rigs last week, bringing the total count to 566, the most since November 2015.
The Organization of the Petroleum Exporting Countries and other producers, including Russia, agreed to cut output by almost 1.8 million barrels per day (bpd) in the first half of 2017 to relieve a two-year supply overhang.
"We are in wait-and-see mode, I suspect at the moment. Oil has reached a fair value equilibrium level given the current supply and demand outlook," said Ric Spooner, chief market analyst at CMC Markets in Sydney.
"Until we get anything to really disrupt that, we may not see too much change," he said, adding the market may draw some comfort from official OPEC figures for January output.
Spooner said that, as with other financial markets, Trump's ban on entry to the U.S. for refugees and citizens from seven Muslim countries had contributed to a "risk-off" attitude.
U.S. oil production has been rising, with the International Energy Agency forecasting total U.S. output growth of 320,000 bpd in 2017 to an average of 12.8 million bpd.
"The rise in U.S. output should not be unexpected," ANZ bank said in a note.
"However, we expect the reductions being made by OPEC will far exceed any rise in the U.S. and quickly reduce the global inventory that has been built up over the past two years," it added.
Hedge funds and money managers boosted bullish wagers on U.S. crude oil to the highest level since mid-2014, Commodity Futures Trading Commission (CFTC) data showed on Friday, as the output cuts agreed by the world's top producers began to eat into a global glut.
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BP and its partners in Azerbaijan's giant ACG oil production complex agreed Thursday to extend the production sharing contract by 25 years to 2049 and to increase the stake of state-owned SOCAR, reducing the size of their own shares.
The U.S. current-account deficit increased to $123.1 billion (preliminary) in the second quarter of 2017 from $113.5 billion (revised) in the first quarter of 2017, according to statistics released by the Bureau of Economic Analysis (BEA). The deficit increased to 2.6 percent of current-dollar gross domestic product (GDP) from 2.4 percent in the first quarter.
U.S. West Texas Intermediate (WTI) crude futures CLc1 were trading up 41 cents, or 0.8 percent, at $50.30 by 0852 GMT, near the three-month high of $50.50 it reached last Thursday. Brent crude futures LCOc1, the benchmark for oil prices outside the United States, were at $55.91 a barrel, up 29 cents, and also not far from the near five-month high of $55.99 touched on Thursday.
“The principal risk regarding Russian and Chinese activities in Venezuela in the near term is that they will exploit the unfolding crisis, including the effect of US sanctions, to deepen their control over Venezuela’s resources, and their [financial] leverage over the country as an anti-US political and military partner,” observed R. Evan Ellis, a senior associate in the Center for Strategic and International Studies’ Americas Program.