OIL PRICES: ABOVE $55 NOW
REUTERS - Oil prices steadied on Tuesday as lower production by OPEC and other exporters balanced growing evidence of a revival in U.S. shale production and sluggish demand.
Benchmark Brent crude LCOc1 was down 10 cents at $55.62 a barrel by 1145 GMT (6.45 a.m. ET). On Monday, the Brent futures contract closed down $1.09 a barrel. U.S. crude CLc1 was 10 cents lower at $52.91 after closing down 82 cents on Monday.
Price support was coming from an effort by the Organization of the Petroleum Exporting Countries and other exporters to cut output by almost 1.8 million barrels per day (bpd) in the first half of 2017.
But while OPEC and Russia have together cut at least 1.1 million bpd so far, rising U.S. production, as well as signs of slowing demand growth, threaten to undermine these efforts.
"The general perception is that OPEC is cutting production, which is supporting prices, but high stock levels, rising rig counts and growing U.S. production are capping gains," said Tamas Varga, analyst at London brokerage PVM Oil Associates.
Societe Generale oil analyst Michael Wittner said U.S. shale oil output was recovering faster than expected as more oil rigs drilled better and more efficient wells more quickly.
"Rig counts are increasing at an accelerating pace, and given the technological advances of the past three years, this should translate into significant supply," Wittner said.
"U.S. shale is coming back, and it's coming back strong."
Since the beginning of the year both crude contracts have traded within a $5 per barrel price range, suggesting a lack of strong price momentum in either direction.
"$55 per barrel is quite obviously the pivot point in this market ... and it has been for some time," said Matt Stanley, a fuel broker with Freight Investor Services (FIS) in Dubai.
Chinese oil demand grew at the slowest pace in at least three years in 2016, Reuters' calculations based on official data showed, the latest indication that demand from the world's largest energy consumer has diminished.
And there are concerns U.S. gasoline demand is stalling.
Gasoline stockpiles rose by almost 21 million barrels in the first 27 days of 2017, compared with an average increase of less than 12 million barrels at the same time of year during the previous decade, according to official inventory data, implying either stalling demand or ongoing oversupply.
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AN - China National Offshore Oil Corp. (CNOOC) is willing to invest $3 billion in its existing oil and gas operation in Nigeria, the Nigerian National Petroleum Corporation (NNPC) said on Sunday following a meeting with the Chinese in Abuja.
REUTERS - Production at Libya’s giant Sharara oil field was expected to fall by at least 160,000 barrels per day (bpd) on Saturday after two staff were abducted in an attack by an unknown group, the National Oil Corporation (NOC) said.
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.