Crude prices are selling off for a second day Tuesday, weighed down by an appreciating dollar and concerns that rising US shale oil production may offset a move by major oil producers to cut global supply.
Still, investors are wagering that the rally isn't over.
"The general perception is that OPEC is cutting production, which is supporting prices, but high stock levels, rising rig counts and growing USA production are capping gains", said Tamas Varga, analyst at London brokerage PVM Oil Associates. At 1:53 pm GMT, the Comex gold futures contract for February delivery was 0.31% or $3.80 higher at $1,235.90 an ounce.
In a note to clients, analysts at JBC Energy said that the oil market is in need of a strong new catalyst to breach $57-level and move higher towards $60, which is not forthcoming at the moment.
But investors remain wary of rising output from countries outside the deal, including the USA, which could wipe out the gains made by OPEC's supply action.
The latest weekly American Petroleum Institute (API) inventory data for the week ending February 3rd reported 14.23mn barrel build in inventories and the second largest build on record.
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Consumers are urged not to open or use the products and to contact to the company to return them and receive a refund. The products were manufactured in the company's Franklin Park, Illinois, facility and shipped across the country.
USA drillers put 17 more oil rigs to work last week, according to oil-field services company Baker Hughes Inc., bringing the total to 583.
There were further concerns surrounding potential oversupply in the United States market, especially with expectations of a renewed increase in USA shale production.
Oil prices fell because of growing concerns about rising U.S. crude oil production and an increase in stockpiles at Cushing, Oklahoma.
Analysts at Rittberbusch & Associates cited "a vastly oversupplied gasoline market as providing major downward pull on crude values".
Gasoline futures RBc1 fell 2.66 cents or 1.77 percent to $1.4837 a gallon.
But while Opec and Russian Federation have together cut at least 1.1 million bpd so far, rising USA production, as well as signs of slowing demand growth, threaten to undermine these efforts.
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