Opec has cut oil production by around 1.1m barrels a day as part of its promise to curb output in January, the cartel said in its monthly oil market report on Monday.
USA benchmark West Texas Intermediate crude for March 2017 delivery was dropping by 0.4%, trading at around $52.99, while Brent crude futures declined approximately 0.6% to $55.66 around 10:40 a.m. EST.
Comparative inventory analysis suggests that the current ~$53 per barrel WTI oil price is at least $6 per barrel too high.
BMI Research said that, based on an estimated compliance with planned production cuts of 92.8 percent by OPEC alone, output was down 1.08 million bpd, led primarily by deep cuts from OPEC's de-facto leader Saudi Arabia.
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CRUDE OIL TECHNICAL ANALYSIS - Crude oil prices recoiled from seven-week range resistance at 53.86 once again.
Gold prices fell as the US Dollar rose alongside Treasury bond yields and the projected 2017 rate hike path implied in Fed Funds futures steepened, undermining the appeal of non-interest-bearing and anti-fiat assets.
OPEC stated that in January, supplies from 11 member countries declined to 29.888 million bpd.
The U.S. and its accelerating shale oil production are particularly in the spotlight.
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But "as US production rebounds, it seems less likely that Saudi Arabia would want to extend the cuts as they run the risk of further helping their competitors", he said. "But lessons from the past have made the market deeply suspicious", said ABN Amro bank in a statement.
"Although this is another bearish report, we're likely to see buying interest this afternoon only to sell off later in the week as has been the case for many weeks now", said Troy Vincent, oil analyst at ClipperData in Louisville, Kentucky.
Earlier this week, the Organisation of the Petroleum Exporting Countries (Opec) revealed it reached a record high of more than 90 per cent compliance with its planned cuts, but oil prices plunged on the news.
Oil prices dipped on Wednesday over concerns that OPEC producers would not be able to maintain their high compliance so far with output cuts aimed at reining in a global fuel supply overhang.
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Some analysts say oil producers will have to reduce production more quickly to drain the global oversupply this year. No longer are they the spawn of the devil, but handmaiden to the achievement of what Opec secretary-general Mohammad Barkindo calls "our common goal of restoring market stability and reviving much needed investment". Later in December, Russia and other producers outside the group committed to take 558,000 barrels a day out of the market.