* Strong dollar, higher oil prices could trigger inflation
By Henning Gloystein
SINGAPORE Feb 16 Oil prices held steady on
Thursday, supported by ongoing supply cuts led by producer group
OPEC, although rising fuel inventories and crude production in
the United States weighed on sentiment.
Brent crude futures were trading at $55.73 per
barrel at 0209 GMT, down just 2 cents from their last close.
U.S. West Texas Intermediate (WTI) crude futures,
were down 4 cents at $53.07 per barrel.
The Organization of the Petroleum Exporting Countries (OPEC)
and other producers including Russia have agreed to cut output
by almost 1.8 million barrels per day (bpd) during the first
half of 2017, and estimates suggest compliance by OPEC is around
The production cuts are aimed at reining in a global fuel
supply overhang that has dogged markets for over two years.
Yet despite action so far, inventories remain bloated and
supplies high, especially in the United States.
U.S. crude oil and gasoline inventories soared to record
highs last week as refineries cut output and gasoline demand
softened, the Energy Information Administration said on
Crude inventories rose 9.5 million barrels in
the week ended Feb. 10, nearly three times more than analysts'
expectations, boosting commercial stocks to an all-time record
at 518 million barrels.
Gasoline stocks rose 2.8 million barrels,
compared with analysts' expectations in a Reuters poll for a
752,000-barrel drop. That pushed inventories of the fuel to a
record at 259 million barrels.
The bloated stocks come as U.S. crude oil production
C-OUT-T-EIA has risen 6.5 percent since mid-2016 to 8.98
Because of the conflicting price drivers of OPEC's cuts and
rising U.S. inventories and production, analysts said that
prices were largely moving sideways.
"Brent oil looks neutral in a range of $55.38-$56.44 per
barrel," said Reuters technical commodities analyst Wang Tao.
Both Brent and WTI crude futures have traded within a $5 per
barrel price range since the start of the year.
(Reporting by Henning Gloystein; Editing by Richard Pullin)