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Oil falls as Opec compliance report underwhelms
Crude down more than 1% per barrel, with signs US output weighing
Oil fell more than 1% on Monday after an Opec report showing high compliance with last year's landmark production cut deal underwhelmed investors while signs of rising US crude output continued to weigh on prices.
Global benchmark Brent crude futures were down 96 cents at $55.74 a barrel at 3:18pm GMT and touched a session low of $55.65.
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West Texas Intermediate crude futures were down 82 cents at $53.04 a barrel and traded as low as $53.01 earlier in the day.
"The good compliance rate of Opec seems to be priced in. The US rig count from Friday is weighing, the numbers support the shale comeback story," said Frank Klumpp, oil analyst at Stuttgart-based Landesbank Baden-Wuerttemberg.
US oil drillers over the past month have added the most drilling rigs since 2012, bringing the total to 591 rigs, the highest since October 2015, oil services company Baker Hughes said in a weekly report.
Speculators cut net long positions on Brent last week by 10,000 contracts, weekly ICE data showed, highlighting investor concerns about rising US production.
In turn, bullish gasoil bets rose to their highest level in four years as demand is expected to increase due to cold weather and maintenance.
Opec and other producers, including Russia, agreed late last year to cut output by almost 1.8 million barrels per day during the first half of 2017.
The group's first official data since then showed on Monday that Opec member Saudi Arabia had cut more deeply than expected, taking compliance in the first month following the agreement to as high as 93%.
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Crude supply from the 11 Opec members with production targets under the deal fell to 29.888 million bpd in January, according to figures from secondary sources which Opec uses to monitor its output.
But high compliance had been expected and the report failed to push oil prices into positive territory on Monday.
Analysts at ABN Amro are sceptical about production cuts delivering higher oil prices and reduced Brent forecasts for the first half of this year to $50 from $55 a barrel.