By Scott DiSavino
| NEW YORK
NEW YORK Oil prices were little changed on Monday, with little news to influence a market waiting to see whether U.S. production from shale fields will grow enough to offset planned output cuts by OPEC, Russia and other producers next year.Brent LCOc1 futures for February delivery were down 36 cents, or 0.7 percent, at $54.85 a barrel by 2:12 p.m. EST (1912 GMT). U.S. West Texas Intermediate crude CLc1 for January rose 8 cents, or 0.2 percent, to $51.98 per barrel on its second to last day as the front-month."Nothing is really going on. The dollar is flat. Oil is flat. It's a low margin Christmas trading week, we don't expect much to happen," said Phil Davis, managing partner of venture capital fund PSW Investments in Woodland Park, New Jersey.A stronger U.S. dollar .DXY pressures demand for dollar-denominated crude as it makes barrels more expensive for users of other currencies.Jim Ritterbusch, president of Chicago-based energy advisory firm Ritterbusch & Associates, said implied U.S. output increases would offset a significant portion of planned OPEC production cuts, "especially since we don't anticipate sustained strong compliance" from OPEC.
"While adherence to (OPEC) cutbacks could be quite high initially, we will be surprised by compliance much above 60 percent by the end of the first quarter as (U.S.) shale responds to a higher-price environment," Ritterbusch said in a note.U.S. oil output is expected to increase as energy companies last week continued to add oil rigs, extending a seven-month drilling recovery.As a result, U.S. oil production is edging up, rising from almost 8.7 million barrels per day (bpd) in July to about 8.8 million bpd in December, according to U.S. Energy Information Administration projections.
A week ago, oil prices climbed to a 17-month high after the Organization of the Petroleum Exporting Countries and some other producers agreed over the prior few weeks to cut almost 1.8 million bpd in oil output starting in January.Some analysts expect oil prices to stay strong into early 2017.
Speculators raised their holdings of Brent crude oil futures to a record high last week.Traders noted a possible delay in Libyan exports provided some support to oil prices earlier in the session.In Libya, a group guarding oil infrastructure said late last week it had reopened a long-blockaded pipeline leading from the oilfields of Sharara and El Feel. Over the weekend, however, a separate group prevented a production restart at El Feel. (Additional reporting by Libby George and Dmitry Zhdannikov in London, and Henning Gloystein in Singapore; Editing by David Gregorio and Andrea Ricci)
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Updated Date: Dec 20, 2016 02:00:08 IST