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Oil Edges Up, Gains Limited

Oil Edges Up, Gains LimitedOil Edges Up, Gains Limited

Oil prices rose on Monday but the gains were limited as investors gauged whether an increase in US drilling rigs and record stockpiles would undermine efforts by producers to cut output and bring the market into balance.

Brent futures were up 23 cents at $56.04 a barrel, while US West Texas Intermediate crude was up 19 cents at $53.59. Both contracts earlier fell slightly in quiet trading, Reuters reported.

"Sustained gains above $55 a barrel, and a hoped for rally to $60 a barrel, (are) both proving incredibly tough nuts to crack," said Jeffrey Halley, senior market analyst at futures brokerage OANDA in Singapore.

"At the crux of the matter is that 90% OPEC compliance is being balanced by ever increasing US shale production," he added.

US energy companies added oil rigs for a fifth consecutive week, Baker Hughes said on Friday, extending a nine-month recovery with producers encouraged by higher prices, which have traded mostly over $50 a barrel since late November.

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