* OPEC cuts support oil above $50 per barrel
* But rising U.S. shale output caps market
By Henning Gloystein
SINGAPORE, Feb 14 Oil rose on Tuesday, supported
by an OPEC-led effort to cut output, but rising production
elsewhere kept prices within the narrow range that has contained
them so far this year.
Brent crude futures, the international benchmark for
oil prices, were trading at $55.76 per barrel at 0112 GMT, up 17
cents from their last close.
U.S. West Texas Intermediate (WTI) crude futures,
were up 14 cents at $53.07 per barrel.
The gains followed 2-percent falls in the previous session.
Both oil benchmarks have remained within a $5 per barrel trading
range since the beginning of the year.
"The usually fairly volatile oil price has barely budged for
two months, the reason being conflicting dynamics in the
market," said Dutch bank ABN Amro.
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 in a bid to rein in a global fuel supply overhang.
But undermining these efforts has been rising production in
the United States, where increased drilling activity especially
by shale oil producers has lifted overall output to 8.98 million
bpd, up 6.5 percent since mid-2016 and to its highest level
since April last year.
"A floor is being formed by the production reduction agreed
by OPEC and several non-OPEC oil producers ... At the other end
of the spectrum, a ceiling is being created by the stepped-up
shale oil production in the U.S.," ABN said.
Despite an OPEC compliance rate of around 90 percent with
the announced cuts, scepticism remained over the end result.
"OPEC producers want the market to believe they will stick
to the agreed production freeze (cut). But lessons from the past
have made the market deeply suspicious," ABN said.
Traders also pointed out that even at an OPEC compliance of
90 percent, and a much lower rate for non-OPEC members,
producers would have to accelerate their cuts in the coming
months in order to achieve the average daily reduction target
agreed for the first half of the year.
ABN said it had reduced its average Brent oil price forecast
for the first half of 2017 "from $55 per barrel to $50 per
barrel, while allowing for a possible temporary dip towards $45
(Reporting by Henning Gloystein; Editing by Joseph Radford)