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Oil turns lower amid skepticism over output cuts

Published 12/19/2016, 08:43 AM
Oil slumps amid skepticism over output cuts
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Investing.com - Oil prices edged lower in subdued trade on Monday, amid skepticism over whether major oil producers will stick to their agreement to cut production next year.

Brent slipped 25 cents, or 0.45%, to $54.95 a barrel by 8:40AM ET (13:40GMT), taking a breather after rallying to a 17-month high of $57.89 last week.

U.S. crude was down 24 cents, or 0.43%, to $52.69, pulling back from a one-and-a-half-year peak of $54.51 touched on December 12.

OPEC members agreed to reduce output by a combined 1.2 million barrels per day starting from January 1, their first such deal since 2008.

The pact was followed by an agreement from 11 non-OPEC producers, led by Russia, to cut their supplies by 558,000 barrels a day.

However, some traders remain skeptical that the planned cuts will be as substantial as the market currently expects.

There are also some worries in the market about production increases in the U.S., where rigs drilling for oil rose to a level not seen in almost a year.

According to oilfield services provider Baker Hughes, the number of rigs drilling for oil in the U.S. last week rose by 12 to 510.

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