TOKYO Feb 20 Oil prices rose on Monday, but
gains were minimal as investors gauged whether an increase in
U.S. drilling and record stockpiles would undermine efforts by
producers to cut output and bring the market into balance.
Brent futures were up 1 cent at $55.82 a barrel at
0050 GMT, while U.S. West Texas Intermediate crude rose 3
cents to $53.43 a barrel.
U.S. energy companies added oil rigs for a fifth consecutive
week, Baker Hughes said on Friday, extending a nine-month
recovery with producers encouraged by higher crude prices, which
have traded mostly over $50 a barrel since late November.
The Organization of the Petroleum Exporting Countries (OPEC)
and other producers, including Russia, agreed last year to cut
output almost 1.8 million barrels per day (bpd) during the first
half of 2017.
Estimates indicate compliance with the cuts is at around 90
percent, while Reuters reported last week that OPEC could extend
the pact or apply deeper cuts from July if global crude
inventories fail to drop enough.
But rising U.S. output helped boost crude and gasoline
inventories to record highs last week, amid faltering demand
growth for the motor fuel.
Hedge funds and other money managers raised their net long
U.S. crude futures and options positions in the week to Feb.14
to a new record high, data from the U.S. Commodity Futures
Trading Commission (CFTC) showed on Friday.
The increase in long positions leaves the market vulnerable
to a downward correction, analysts have said.
The U.S. market will be closed on Monday for the Presidents
(Reporting by Aaron Sheldrick; Editing by Joseph Radford)