Oil prices were little changed on Monday, with little news to influence a market waiting to see whether U.S. production from shale fields will grow enough to offset planned output cuts by OPEC, Russia and other producers next year.
Brent futures for February delivery were down 24 cents, or 0.4 percent, at $54.97 a barrel by 11:43 a.m. EST (1643 GMT). U.S. West Texas Intermediate crude for January rose 6 cents, or 0.1 percent, to $51.96 per barrel on its last day as the front-month.
“Implied U.S. output increases… will offset a significant portion of the planned OPEC production cuts especially since we don’t anticipate sustained strong compliance,” Jim Ritterbusch, president of Chicago-based energy advisory firm Ritterbusch & Associates, said in a note.
“While adherence to (OPEC) cutbacks could be quite high initially, we will be surprised by compliance much above 60 percent by the end of the first quarter as (U.S.) shale responds to a higher price environment,” Ritterbusch said.
U.S. oil output is expected to increase as energy companies last week continued to add oil rigs, extending a seven-month drilling recovery.
“Since its trough on May 27, producers have added 194 oil rigs (+61 percent) in the U.S.,” U.S. bank Goldman Sachs said.
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