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UPDATE 8-Oil steady as rising U.S. output offsets record bullish bets

Published 28/02/2017, 07:00 am
© Reuters.  UPDATE 8-Oil steady as rising U.S. output offsets record bullish bets
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* Speculators raise net long positions to record high

* UAE and Iraq pledge to catch up with output cut targets

* Iran, Libya and Nigeria remain exempt from OPEC production cuts

* U.S. drillers add five rigs in week to Feb. 24 (Adds settlement prices, fresh quote)

By Scott DiSavino

NEW YORK, Feb 27 (Reuters) - Oil prices ended little changed on Monday as the prospect for U.S. crude production to continue growing offset reports of high compliance to the OPEC production cut agreement and record bullish bets that prices would rise further.

On its penultimate day as the front-month contract, Brent LCOc1 futures for April delivery lost six cents, or 0.1 percent, to settle at $55.93 a barrel, while U.S. West Texas Intermediate crude (WTI) CLc1 gained six cents, or 0.1 percent, to $54.05.

Investors raised their bets on rising Brent crude oil prices to a new high last week, breaking the 500,000-lot mark for the first time on record, data from the InterContinental Exchange showed. O/ICE

Money managers also raised their bullish U.S. crude futures and options positions in the week to Feb. 21 to the highest on record, the U.S. Commodity Futures Trading Commission (CFTC) said on Friday. now hold 951,312 lots' worth of U.S. and Brent crude futures and options, equivalent to nearly 1 billion barrels of oil valued at more than $52 billion, based on current Brent and WTI benchmark prices.

"With speculators increasing their bullish bets on U.S. crude to an all-time high, the risk of disappointment and subsequent downward spiral in prices has never been greater," oil brokerage PVM's Stephen Brennock said.

Among the risks is the level of compliance to the deal between the Organization of the Petroleum Exporting Countries (OPEC) and other producers to bring down oil output by about 1.8 million barrels per day (bpd).

OPEC's record compliance with the deal has surprised the market, and the biggest laggards, the United Arab Emirates and Iraq, have pledged to catch up with their targets. International Energy Agency put OPEC's average compliance at a record 90 percent in January. Based on a Reuters average of production surveys, compliance stands at 88 percent.

A Reuters survey of OPEC production later this week will show compliance for February. Libya and Nigeria, meanwhile, will remain exempted from the production cuts for the first six months of 2017, OPEC's Secretary General said. bullish speculation already at a record high ... a couple things you have to be concerned about if you are a bull are the rebound in U.S. oil production and growing output from Iran, Nigeria and Libya," said Kyle Cooper, a consultant for ION Energy in Houston.

U.S. producers boosted crude production to over 9 million bpd during the week ended Feb. 17 for the first time since April 2016 as energy firms search for more oil, according to federal data.

U.S. drillers added five oil rigs in the week to Feb. 24, bringing the total count up to 602, the most since October 2015, energy services firm Baker Hughes Inc BHI.N said on Friday. GRAPHIC on Brent crude oil technicals

http://reut.rs/2mtxOGp GRAPHIC on U.S. oil technicals

http://reut.rs/2lVl90Q

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