The production-cut agreement spurred a change in market structure that meant traders had less incentive to store oil at sea, prompting the flow of supplies floating on ships to onshore sites.
U.S. West Texas Intermediate (WTI) crude futures were down 14 cents at $53.04 a barrel, after falling by as much as 55 cents earlier in the day. "The soft U.S. CPI (consumer price index) on Friday will ease yields further, also undermining the reflationist markets such as oil and precious metals", he said.
At a time when OPEC and other producing nations have been trying to cut output, government drilling data showed USA shale production next month was set to rise to 5.19 million barrels per day (bpd). The price for Brent crude oil was down 0.13 percent about a half hour before the start of trading in NY to $55.82 per barrel. Brent touched $54.61 intraday, its lowest since April 7.
Saudi Arabia, Iraq and Kuwait believe $60 a barrel will lift their economies and allow for more energy-industry investment, the officials said, without jumpstarting too much American shale output, which can be ramped up and down with prices more easily than most oil production.Prices lost 53 cents to $52.65 on Monday, the lowest close since April 7.
On Monday, shortly before the Nymex settlement, a monthly report from the Energy Information Administration forecast a rise of 124,000 barrels a day in May to 5.193 million barrels a day for crude-oil production in seven major USA shale-oil plays.
But OPEC data shows global inventories increasing by 430,000 barrels per day (bpd) in the first quarter of this year: "The world is still over-supplied with oil, according to its biggest producer nations", Lee writes.
The compliance rate with the agreement among OPEC members and some non-members, including Russian Federation, "has been impressive", the International Energy Agency (IEA) said in its monthly oil market report, giving a lift to oil prices.
"The oil market was supported by data that China imported a record 9.17 million barrels last month".
"We've fought to a draw today and the inventory report will help break us out of this logjam", Kilduff said.
A preliminary Reuters poll showed analysts expected US crude stocks to have fallen in the week to April 14, building on a surprise decline the previous week. Off-topic, inappropriate or insulting comments will be removed.