Oil prices were steady on Tuesday as news of lower production by OPEC and other key exporters was balanced by reports of more drilling and higher output in the United States.
Benchmark Brent crude LCOc1 was down 5 cents at $55.18 a barrel by 1150 GMT, while U.S. light crude CLc1 rose 5 cents to $52.80.
Ministers from the Organization of the Petroleum Exporting Countries and big producers outside the group said on Sunday that of the almost 1.8 million barrels per day (bpd) they had agreed to remove from the market starting on Jan. 1, 1.5 million bpd had already been cut.
Ministers were engaged in a campaign of “bullish rhetoric”, talking up their deal to make sure the market responds positively, said Tamas Varga, senior analyst at London brokerage PVM Oil Associates.
“Call it a charm offensive or determination to succeed,” Varga said. “One thing is certain: the level and the depth of cooperation between OPEC and non-OPEC producers is unprecedented.”
Bernstein Energy said global oil inventories declined by 24 million barrels to 5.7 billion barrels in the fourth quarter of last year from the previous quarter. This amounts to about 60 days of world oil consumption.
“This is the biggest quarterly decline since the fourth quarter of 2013, confirming that inventory builds are now reversing as the market shifts from oversupply to undersupply,” Bernstein analysts said in a note to clients.