OIL PRICES: ABOVE $55 STILL
REUTERS- Oil prices slipped on Tuesday as rising U.S. drilling activity undermined efforts by OPEC and other producers to cut output in a move to prop up the market.
Brent crude oil LCOc1 was down 20 cents a barrel at $55.03 by 0900 GMT. U.S. light crude CLc1 was down 30 cents a barrel at $52.33.
Both benchmarks have traded within fairly narrow ranges over the last two months, since the Organization of the Petroleum Exporting Countries agreed to cut output by almost 1.8 barrel per day (bpd) in an attempt to clear a global glut.
After an initial price rise on hopes that markets would rebalance quickly, Brent and U.S. crude futures have both been held back by evidence of higher U.S. oil drilling and forecasts of a rebound in shale production.
Support from OPEC cuts and pressure from shale are still dominating the global oil market, keeping Brent close to $55 a barrel and U.S. crude not far from $52.50.
"OPEC adherence to production targets has been strong," said U.S. investment bank Jefferies, but added that U.S. drilling "activity levels are already picking up".
As a result, Jefferies said it was "not inclined to change our Brent price forecast - $57.75 per barrel in 2017, $71.75 per barrel in 2018".
Following months of increased drilling, U.S. oil production C-OUT-T-EIA has risen by 6.3 percent since July last year to almost 9 million bpd, according to data from the U.S. Energy Information Administration.
Goldman Sachs estimates that year-on-year U.S. oil "production will rise by 290,000 bpd in 2017" if a backlog on rigs that are still to become operational is accounted for.
The differing outlook between global oil markets and the U.S. market has focused attention on the spread between Brent and U.S. crude oil futures, also known as West Texas Intermediate or WTI.
Brent's premium over U.S. crude for March is now around $2.70 a barrel, reflecting a tighter market as OPEC's cuts bite and a more over-supplied U.S. as drilling increases.
The spread was closer to $1 a barrel in November, before OPEC agreed to cut production.
"Brent is supported by OPEC cuts, (but) WTI falls due to rising U.S. output," Commerzbank commodities analyst Carsten Fritsch told the Reuters Global Oil Forum.
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IMF - Output grew by 3.8 percent in 2017, underpinned by a resilient non-hydrocarbon sector, with robust implementation of GCC-funded projects as well as strong activity in the financial, hospitality, and education sectors. The banking system remains stable with large capital buffers. Growth is projected to decelerate over the medium term.
IMF - Higher oil prices and short-term portfolio inflows have provided relief from external and fiscal pressures but the recovery remains challenging. Inflation declined to its lowest level in more than two years. Real GDP expanded by 2 percent in the first quarter of 2018 compared to the first quarter of last year. However, activity in the non-oil non-agricultural sector remains weak as lower purchasing power weighs on consumer demand and as credit risk continues to limit bank lending.