Recap: Rising U.S. crude oil production negated signs of output cuts from within OPEC, and in turn pressured oil futures. March WTI fell as much as 1.9%, to a low of $52.21 prior to slicing losses, while Brent for March delivery slipped as much as 1.5%, bottoming at $54.65 during trading on Monday. March WTI finished at $52.75, down 47 cents, or 0.88%. March Brent settled at $55.23, down 26 cents, or 0.47%.
March WTI bounced around its 10-day moving average of $52.85, while continuing to hold below the 30-day moving average, currently set at $53.64. Resistance above these 2 levels rests at $54.30, and to the downside, support can be found around $52.20.
February RBOB finished close to unchanged, settling at $1.567 a gallon, while February heating oil slipped 1.9 cents, or 1.2%, to $1.627 a gallon.
Fundamental News: Genscape reported that crude oil inventories held in Cushing, Oklahoma in the week ending January 20th fell by 213,761 barrels.
Ministers representing members of OPEC and non-OPEC producers said at a meeting in Vienna on Sunday that out of the 1.8 million bpd they agreed to cut, 1.5 million bpd had already been taken out of the market. The committee, comprising ministers from Kuwait, Russia, Algeria, Venezuela and Oman, will meet again on March 17th in Kuwait and again in May. Russia's Energy Minister, Alexander Novak, said the monitoring committee will assess data submitted by each producer country, along with information from agencies such as IHS Cambridge Energy Research Associates, Argus Media and the IEA. The committee will evaluate compliance with production targets only, though the technical group may also look at export data to support its analysis. He stated that expectations have been exceeded.
Saudi Arabia's Energy Minister, Khalid Al-Falih, said the countries have already cut oil supply by 1.5 million bpd, more than 80% of their collective target. He said compliance is great and he was positive that non-OPEC producers were taking part in the cuts. He also said Saudi Arabia has exceeded its target by cutting output by more than 500,000 bpd to less than 10 million bpd. Meanwhile, Kuwait's Oil Minister, Essam Al-Marzouk, said oil producers were in "total agreement" on the monitoring mechanism and would not accept anything less than 100% compliance with the cuts. Kuwait was only required to cut output by 131,000 bpd, but having already reached that level, has cut its output by a further 6,000 bpd and plans to cut its output to 148,000 bpd.
Venezuela's Oil Minister, Nelson Martinez, said the country's oil production was already down by half of its commitment.
Iraq's Oil Minister, Jabar Ali al-Luaibi, said the country has reduced its oil production by about 180,000 bpd and plans to cut a further 30,000 bpd before the end of the month. The cut came from a 4.75 million bpd level. Iraq agreed to cut its output by 210,000 bpd under a deal struck in December between OPEC and non-OPEC producers. He stated that most oil majors working on its territory were participating in the oil output reductions. Iraq's Oil Minister said it was too early to say whether the deal needed to be extended and that he expected oil prices to increase to $60-$65/barrel.
Early Market Call - as of 9:25 AM EDT
WTI - Mar $53.10 up 35 cents
RBOB - Feb $1.5860 up 1.93 cents
HO - Feb $1.6363 up 98 points
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