Oil holds steady as traders weigh OPEC cuts, U.S. drilling-SapForex24

Oil prices were little changed during European morning hours on Tuesday, as market players continued to weigh the prospect of production cuts by major crude-producing nations against a rise in U.S. drilling.

The U.S. West Texas Intermediate crude April contract shed 5 cents, or around 0.1%, to $54.00 a barrel by 4:20AM ET (09:20GMT).

Elsewhere, Brent oil for May delivery on the ICE Futures Exchange in London dipped 2 cents to $56.40 a barrel.

Comex Market Update-SapForex24
          Comex Market Update-SapForex24

Oil prices have been trading in a narrow $5 range around the mid-$50s over the past two months as sentiment in oil markets has been torn between hopes that oversupply may be curbed by output cuts announced by major global producers and expectations of a rebound in U.S. shale production.

Data from oilfield services provider Baker Hughes revealed that the number of active U.S. rigs drilling for oil rose by five last week, the sixth weekly increase in a row.

That brought the total count to 602, the most since October 2015, raising concerns that the ongoing rebound in U.S. shale production could derail efforts by other major producers to rebalance global oil supply and demand.

Hedge funds extended their bullish bets on oil to an all-time high last week as OPEC and non-OPEC countries made a strong start to lowering their oil output by almost 1.8 million barrels per day by the end of June, with compliance currently at around 90%.

OPEC could extend its oil supply-reduction pact with non-members or even apply deeper cuts from July if global crude inventories fail to drop to a targeted level, OPEC sources said earlier this month.

Elsewhere on Nymex, gasoline futures for April shed 0.2 cents, or around 0.2%, to $1.738 a gallon, while March heating oil dipped 0.2 cents to $1.645 a gallon.
Natural gas futures for April delivery slumped 1.9 cents, or almost 0.7%, to $2.674 per million British thermal units.

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