The West Texas Intermediate for March Delivery erased 0.84 dollars to settle at 52.17 dollars a barrel on the New York Mercantile Exchange, while Brent crude for April delivery decreased 0.67 dollars to close at 55.05 dollars a barrel on the London ICE Futures Exchange. Later, non-OPEC countries agreed to cut the output by 558,000 barrels per day during the meeting held December 10, 2016.
Ten OPEC members obligated to reduce oil output under the agreement signed in 2016, achieved 91 percent of their required cuts in January, according to the S&P Global Platts survey.
Iranian Oil Minister Bijan Zanganeh said OPEC should cut crude production "a bit more" in the second half of 2017, Fars news agency reported on Tuesday. The US oil rig count rose by 17 to 583 for the week ending on February 3, 2017.
The good thing for the oil market is that Opec nations are adhering to the agreed output cut.
Oil Prices Lower as Investors Speculate on Supply
The oilfield service company noted in its latest assessment that 729 oil and gas rigs were operation in the U.S., along with 343 in Canada, a rise of 158 and 101 rigs respectively compared to the first week February in 2016. The contract lost 82 cents to $53.01 on Monday.
The Organization of the Petroleum Exporting Countries agreed on November 30 to cut output by 1.2 million bpd to 32.5 million bpd for the first six months of 2017, in addition to 558,000 bpd of cuts agreed by non-members such as Russia, Oman and Mexico. After the average oil price fell to its lowest in 12 years at $44 a barrel last year, BP said it expected prices to have found a floor for this year at $50 a barrel following a decision by major Opec and non-Opec producers to limit output.
Gasoline stockpiles rose by nearly 21 million barrels in the first 27 days of 2017, more than double the average increase of less than 12 million barrels at the same time of year during the previous decade, official inventory data showed.
Some think US gasoline demand is stalling. In recent weeks, U.S. crude inventories rose 2.5 million barrels, while gasoline stockpiles jumped 1.2 million barrels. The tension between the two countries could further support oil prices increasing in the future.