Oil Prices in Tight Range

Oil Prices in Tight Range

Oil prices were little changed on Tuesday, trading in a tight range as rising US shale output offset OPEC crude production cuts, with investors seeking clearer direction from upcoming inventory data and comments from senior oil officials.
Brent crude was down 3 cents at $55.98 a barrel. US West Texas Intermediate crude was flat at $53.20. Both benchmarks have traded in negative and positive territory since the start of Asia trading, Reuters reported.
Oil prices have been entrenched in a $3 band since February, failing to take off after OPEC implemented, to a surprisingly high degree, the first cut in production in eight years.
Capping any upsurge has been an inevitable rise in US shale oil drilling after WTI rose firmly above the $50 a barrel level in December following OPEC's sealing of the deal, which also included several non-OPEC producers such as Russia.
"Brent is pivoting around $56, with focus on last week's low at $55 and resistance at $57.20," said Ole Hansen, Saxo Bank's head of commodity strategy.
"Market-wise, we have seen open interest on Brent fall to a six-week low as non-performing or even loss making longs have begun to reduce exposure," he added.
Fund managers doubled their net long positions in Brent, WTI and options to 951 million barrels between the start of November and Feb. 21, betting OPEC's high compliance with the cut agreement would push up prices.
But with Russia's lackluster participation in the cuts, rising shale output and signs that OPEC countries increased their crude exports in February after a January reduction, that bullish sentiment has wavered.

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