Brent Crude Oil Steadies at $55

Oil prices steadied on Tuesday as rising US drilling activity helped undermine efforts by OPEC and other producers to cut output to try to prop up the market.

Brent crude oil was up 10 cents a barrel at $55.33. US light crude was down 10 cents a barrel at $52.53, Reuters reported. Both benchmarks have traded within fairly narrow ranges over the last two months, since the Organization of Petroleum Exporting Countries agreed to cut output by almost 1.8 million barrel per day in an attempt to clear a global glut.

After an initial price rise on hopes that markets would rebalance quickly, Brent and US crude futures have both been held back by evidence of higher US oil drilling and forecasts of a rebound in shale production. OPEC's oil production has fallen by more than 1 million bpd this month, a Reuters survey showed on Tuesday, pointing to a strong start by the exporter group in implementing its first supply cut deal in eight years.

But US shale output is slowly increasing, helping keep a lid on prices. Brent has been close to $55 a barrel and US crude not far from $52.50 for most of January.

Following months of increased drilling, US oil production has risen by 6.3% since July last year to almost 9 million bpd, according to data from the US Energy Information Administration.