Oil prices rose March 17, helped by a weaker dollar, as investors weighed the impact of OPEC production cuts against rising U.S. shale oil output and persistently high inventories.
Saudi Energy Minister Khalid al-Falih said March 16 oil output cuts by OPEC and non-OPEC producers could be extended beyond June if oil stocks stayed above a long-term average.
But analysts said the comments gave limited support because Riyadh has said it needs cooperation to rebalance the market and non-OPEC producers, such as Russia, have yet to deliver fully on reduction commitments in the first half of 2017.
Brent crude was up 27 cents at $52.01 per barrel (bbl) by 8:53 a.m. CT (13:53 GMT). U.S. West Texas Intermediate light crude was up 24 cents at $48.99.
"The market remains relatively calm today with concerns about having to extend the production cut deal being offset by a weaker dollar," said Ole Hansen, Saxo Bank head of commodity strategy.
Oil prices, which lost ground earlier March 17, have found some support from dollar weakness after the U.S. Federal Reserve indicated it would not accelerate plans for rate rises. The fall in the greenback boosted dollar-denominated crude.
Investors will also look for more direction from data due later on March 17. The Baker Hughes Inc. (NYSE: BHI) weekly rig count will indicate activity in the U.S. shale industry and the U.S. Commodity Futures Trading Commission releases calculations of net long and short positions in the crude futures market.
Oil prices fell sharply last week on concerns that OPEC-led production cuts were not reducing the global supply overhang as quickly as expected in the face of increased U.S. output.
OPEC and non-OPEC members reached agreement last year to cut output by a combined 1.8 MMbbl/d in the first half of 2017.
But OPEC's monthly report showed global oil inventories rose in January to 278 MMbbl above the five-year average.
Investors took some comfort from a dip in U.S. stockpiles in the week to March 10, after nine weekly rises. However, the fall in U.S. inventories was a modest 237,000 bbl, leaving 528 MMbbl in storage, close to record highs.
In a further sign that OPEC's efforts have had little impact so far, oil shipments to Asia have increased 3% since the OPEC supply cut deal was made.
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