Oil edged up on Monday on statements over the weekend from OPEC and other producers that they have been successfully implementing output cuts, but gains were limited by a surge in U.S. drilling. OPEC and non-OPEC countries have made a strong start to lowering their oil output under the first such pact in more than a decade, energy ministers said on Sunday as producers look to reduce oversupply and support prices. Ministers said 1.5 million of almost 1.8 million barrels per day (bpd) had already been taken out of the market.
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"It is the weaker dollar to start the week and comments over the weekend from OPEC and non-OPEC producer that compliance has been very good, giving a bit of boost to oil prices," said Jeffrey Halley, senior market analyst at OANDA brokerage in Singapore. "Oil is trading in a range. In the medium term it is going to be tough for oil to break out. The more oil goes up, the more these shale drillers are going to hedge by the futures." Brent crude, the international benchmark for oil prices, was trading at $55.55 per barrel at 0215 GMT, up 6 cents from its last close. U.S. West Texas Intermediate (WTI) crude futures were up 5 cents at $53.27 a barrel.
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