Crude Prices Dip

Global oil prices dipped on Tuesday but continued to trade in a tight range with the OPEC-led output cuts offset by increasing crude production from the United States.

Benchmarks Brent and West Texas Intermediate crude oil on Tuesday traded several cents on either side of the previous day's close. Brent was 16 cents lower at $55.77 a barrel while the US benchmark was 9 cents lower at $53.96, Reuters reported.

The Organization of Petroleum Exporting Countries has so far surprised the market by showing record compliance with oil-output curbs, and could improve in coming months as the biggest laggards - the UAE and Iraq - pledge to catch up quickly with their targets.

But while the Nov. 30 agreement to reduce production prompted oil prices to rise $10 a barrel, they have been trading in a narrow $3 range in recent weeks.

"Oil is well and truly stuck and the falling futures volumes do not indicate that we have much of a bull-bear fight either," Saxo Bank head of commodity strategy Ole Hansen said.

"Having failed on a couple of occasions to break higher, it is only natural to see oil prices correct lower. I'm looking for Brent to settle at $55 WTI at $52.70 per barrel."

OPEC agreed to curb output by about 1.2 million barrels per day from Jan. 1, the first cut in eight years.

In addition, 11 non-OPEC oil producers have promised to cut their output - Russia reduced production by 124,000 bpd this month compared with October levels, Interfax reported on Tuesday citing a source familiar with the data.