TOKYO (Feb 20): Oil prices rose on Monday, but gains were minimal as investors gauged whether an increase in U.S. drilling and record stockpiles would undermine efforts by producers to cut output and bring the market into balance.
Brent futures were up 1 cent at $55.82 a barrel at 0050 GMT, while U.S. West Texas Intermediate crude rose 3 cents to $53.43 a barrel.
U.S. energy companies added oil rigs for a fifth consecutive week, Baker Hughes said on Friday, extending a nine-month recovery with producers encouraged by higher crude prices, which have traded mostly over $50 a barrel since late November.
The Organization of the Petroleum Exporting Countries (OPEC) and other producers, including Russia, agreed last year to cut output almost 1.8 million barrels per day (bpd) during the first half of 2017.
Estimates indicate compliance with the cuts is at around 90 percent, while Reuters reported last week that OPEC could extend the pact or apply deeper cuts from July if global crude inventories fail to drop enough.
But rising U.S. output helped boost crude and gasoline inventories to record highs last week, amid faltering demand growth for the motor fuel.
Hedge funds and other money managers raised their net long U.S. crude futures and options positions in the week to Feb.14 to a new record high, data from the U.S. Commodity Futures Trading Commission (CFTC) showed on Friday.
The increase in long positions leaves the market vulnerable to a downward correction, analysts have said.
The U.S. market will be closed on Monday for the Presidents Day holiday. - Reuters