By Dan Strumpf
Oil futures edged higher in Asia trading Tuesday, rebounding from an overnight loss as traders continued to weigh the outlook for global oil production.
Light, sweet crude for March delivery rose 24 cents, or 0.5%, to $52.99 in the Globex electronic session of the New York Mercantile Exchange. March Brent crude added 28 cents, or 0.5%, to $55.51.
Futures have been trading in a narrow range around the low $50s over the past month as traders await updates on the progress in production cuts by the Organization of the Petroleum Exporting Countries. The cartel in November agreed to cut output amounting to about 1% of global production, but uncertainty remains over members' commitment to the pact.
Meanwhile, U.S. oil production is showing signs of recovering following the cut agreement. And although production is falling in China, government data on Monday showed Chinese exports of refined fuels are at a record high, more than doubling to 15.4 million metric tons in 2016 from the previous year.
A big increase in the number of working oil-drilling rigs in the U.S. "took the gloss off the better-than-expected adherence by OPEC to the agreed production cuts," according to Australian bank ANZ.
On Friday, data from Baker Hughes showed the number of rigs in the U.S. rose by 29 to a total of 551 in the week ended Jan. 20. That was the biggest one-week increase in nearly four years.
The report came as OPEC said it and other oil-exporting countries had succeeded in cutting 1.5 million barrels a day from the oil market, reflecting about 80% of the amount they pledged to cut.
"The drop in prices due to the data will serve as a continuous thorn in the side of OPEC but at some point either the market will reach an equilibrium between what the world demands and what is produced," Stuart Ive, private client manager at OMF, wrote in a note to clients. "Chinese and Indian demand along with U.S. production will be key to how this seesaw plays out."
Nymex reformulated gasoline blendstock for February--the benchmark gasoline contract--rose 109 points to $1.5776 a gallon, while February diesel traded at $1.6328, 63 points higher.
ICE gasoil for February changed hands at $486.50 a metric ton, up a dollar from Monday's settlement.
Write to Dan Strumpf at firstname.lastname@example.org
(END) Dow Jones Newswires
January 23, 2017 23:22 ET (04:22 GMT)
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