By Lucy Craymer
Crude oil prices pulled back during early Asia trading on Wednesday reversing gains made in the New York session.
On the New York Mercantile Exchange, light, sweet crude futures for delivery in March traded at $52.88 a barrel at 0308 GMT, down $0.32 in the Globex electronic session. April Brent crude on London's ICE Futures exchange fell $0.29 to $55.68 a barrel.
Bears continue to point to increased U.S. oil rig activity, Trump immigration actions and potential issues with Mexico as a reason to nudge prices lower, said Stuart Ive, a private client advisor at OM Financial.
"News that hedge funds are net long 160 million barrels in calendar spread options on the New York Mercantile Exchange (Nymex) shows how the fund managers are expecting the price curve to switch to backwardation as the physical market rebalances itself from the excessive supply," Mr. Ive noted.
Prices have been wavering for many weeks in the low $50s as traders awaited data on OPEC's compliance with recently agreed cuts. The OPEC data released Monday showed a month-on-month decline of 890,000 barrels a day in January from the previous month to 32.1 million b/d. The drop indicates a 90% compliance level so far by producers who had agreed to curtail their output--in line with figures reported by the International Energy Agency last week, and well above what many market participants were expecting.
"OPEC has set itself a high benchmark given its high January compliance, applying pressure to keep this record up in order to not disappoint the market," BMI Research said in a note.
Nymex reformulated gasoline blendstock for March--the benchmarkgasoline contract--fell 84 points to $1.5383 a gallon, while March diesel traded at $1.6277, 105 points lower.
ICE gasoil for March changed hands at $492.75 a metric ton, down $4.50 from Tuesday's settlement.
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(END) Dow Jones Newswires
February 14, 2017 22:51 ET (03:51 GMT)
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