SINGAPORE Jan 11 Oil prices recovered slightly
on Wednesday from steep slides the previous day, but traders
said markets remained under pressure from signs that planned
OPEC output cuts were being poorly implemented and as supplies
from elsewhere rose.
U.S. West Texas Intermediate (WTI) crude oil futures
were trading at $50.98 a barrel at 0028 GMT, 16 cents above
their last settlement, but 6.25 percent below the start of the
Prices for Brent crude futures, the international
benchmark for oil prices, were yet to trade.
"Traders continued to fret about rising U.S. supply and
compliance by OPEC to agreed-upon production cuts," ANZ bank
said on Wednesday.
The U.S. Energy Information Administration (EIA) said on
Tuesday that increased drilling activity was set to boost crude
oil production this year by 110,000 barrels per day (bpd) to 9
million bpd compared with a year ago. Last month, it said
production would fall by 80,000 bpd.
For 2018, oil production is set to rise by 300,000 bpd to
9.3 million bpd, the EIA added.
Another concern for traders is high U.S. crude stockpiles,
with the EIA is scheduled to release its latest figures on
"Traders appeared nervous ahead of this week's EIA report.
With inventories at the highest seasonal level in three decades,
another increase in this week's report could see prices come
under further pressure," ANZ said.
Outside the United States, there were lingering doubts over
compliance with planned production cuts from members of the
Organization of the Petroleum Exporting Countries (OPEC).
OPEC's second biggest producer Iraq, plans to raise crude
exports from its southern port of Basra to an all-time high in
February, keeping shipments high even as OPEC production cuts
take effect this month.
The country's State Oil Marketing Company (SOMO) plans to
export 3.641 million barrels per day (bpd) of crude in February,
according to trade sources and preliminary loading schedules,
potentially beating a record of 3.51 million bpd set in
Some cuts, however, appear to be coming. In Russia, which
isn't an OPEC member but which also agreed to cut output,
extreme cold as low as minus 60 degrees Celsius has already
helped to knock out production by around 100,000 bpd in the
first few days of January, and many oil engineers expect more
reductions as production facilities struggle to cope with the
(Reporting by Henning Gloystein; Editing by Joseph Radford)