Investing.com - Oil prices edged higher in a familiar trading range during North American morning hours on Monday, as market players continued to weigh the prospect of production cuts by major crude-producing nations against a rise in U.S. drilling.
Brent oil for April delivery on the ICE Futures Exchange in London tacked on 31 cents, or about 0.6%, to $56.12 a barrel by 10:00AM ET (15:00GMT).
The global benchmark scored a loss of 89 cents, or around 1.6%, last week, the second straight weekly decline.
Elsewhere, crude oil for April delivery on the New York Mercantile Exchange inched up 20 cents, or 0.4%, to $53.98 a barrel.
New York-traded oil futures slumped 46 cents, or nearly 0.9%, last week, snapping a four-week win streak.
Trading activity was likely to stay light as markets in the U.S. remain closed for President’s Day on Monday.
Futures have been trading in a narrow range around the lower-to-mid-$50s over the past two months as sentiment in oil markets has been torn between expectations of a rebound in U.S. shale production and hopes that oversupply may be curbed by output cuts announced by major global producers.
Data from oilfield services provider Baker Hughes on Friday revealed that the number of active U.S. rigs drilling for oil rose by six last week, the fifth weekly increase in a row. That brought the total count to 597, the most since November 2015.
The revival in U.S. drilling has raised concerns that the ongoing rebound in U.S. shale production could derail efforts by other major producers to rebalance global oil supply and demand.
OPEC and non-OPEC countries have made a strong start to lowering their oil output under the first such pact in more than a decade.
Latest data showed the group’s production in January declined by 890,000 barrels a day from the previous month to 32.14 million barrels a day. The drop indicates a 90% compliance level so far by producers who had agreed to curtail their output.
January 1 marked the official start of the deal agreed by OPEC and non-OPEC member countries such as Russia in November last year to reduce output by almost 1.8 million barrels per day to 32.5 million for the next six months.
OPEC could extend its oil supply-reduction pact with non-members or even apply deeper cuts from July if global crude inventories fail to drop to a targeted level, OPEC sources said on Thursday.
Elsewhere on Nymex, gasoline futures for March declined 0.6 cents, or 0.4%, to $1.506 a gallon, while March heating oil added 1.2 cents ,or 0.7%, to $1.648 a gallon.
Natural gas futures for April delivery sank 7.7 cents, or 2.6%, to $2.874 per million British thermal units, a three-month low, as forecasts continued to call for mostly warmer-than-normal weather in key regions across the U.S. for the rest of the winter.