Oil slips nearly 1 percent on concerns over rising U.S. output

Fri Feb 24, 2017 3:01pm EST
 
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By Devika Krishna Kumar

NEW YORK (Reuters) - Oil prices fell about 1 percent on Friday as worries about rising U.S. supplies outweighed OPEC pledges to boost compliance with output curbs.

But crude prices were on track for a weekly rise as traders have begun to pull out barrels from pricey storage, with physical markets showing signs of tightening.

U.S. drillers added oil rigs for a sixth consecutive week, extending a nine-month recovery, energy services firm Baker Hughes Inc BHI.N said. [RIG/U]

Prices were also pressured by book squaring ahead of the weekend and upcoming Feb. 28 expirations in Brent futures for April delivery, heating oil for March delivery HOc1, and March RBOB gasoline RBc1, analysts and traders said.

Brent crude oil LCOc1 settled down 59 cents, or 1.04 percent, at $55.99 a barrel, while U.S. West Texas Intermediate CLc1 ended the session 46 cents lower at $53.99 a barrel.

However, both benchmarks notched a weekly gain of about 1.1 percent.

"The oil market remains focused on the global rebalancing act, with attention centered on OPEC compliance and U.S. production growth," said Michael Tran, director of energy strategy at RBC Capital Markets in New York.

"The push-pull situation between stock draws relative to price-elastic U.S. shale remains paramount to the rebalance."   Continued...

 
A pump jack is seen at sunrise near Bakersfield, California October 14, 2014.   REUTERS/Lucy Nicholson/File Photo