Oil prices give up gains; set for weekly drop

"Although destocking in Cushing has continued, with stocks there falling below 30 million barrels for the first time since late 2014, the overall increase in USA oil stocks has overshadowed the good news", Fawad Razaqzada, market analyst at Forex.com, said in a note.

At the Multi Commodity Exchange, crude palm oil for delivery in April shed 40 paise, or 0.07 per cent, to Rs 600 per 10 kg in business turnover of 8 lots.

"For now though, the gains in USA supply are prevailing in shaping sentiment in the oil market, other analysts said".

The rise in USA output in recent weeks has been overshadowing supply curbs by other producers, led by the Organization of the Petroleum Exporting Countries and Russian Federation. US crude CLc1 was up 16 cents at $61.15. U.S. crude slipped in the last month of 2017, but in November set a production record of 10.06 million barrels per day (MMBPD), the U.S. Energy Information Administration reported.

"As a result, in January WTI prices rose as high as US$66 per barrel for the first time since December 2014, before declining slightly in February". US crude oil production increased steadily through 2017, reaching its highest level in more than three decades.

OPEC officials are expected to meet US shale executives next week in Houston, at the annual CERAWeek conference, presented by IHS Markit. A weaker United States dollar can boost oil and other greenback-denominated currencies. "A transition of the deal is needed but not yet visible, with both an over-tightening and an orderly unwinding being potential scenarios", said Norbert Rucker, head of commodity research at Swiss bank Julius Baer.

Still, both benchmarks ended the week lower, snapping a two-week streak of gains, with USA futures tumbling 3.62% during the week and Brent falling 3.98%.

As of 1130 GMT, the Dollar Index was down 0.34, standing at 89.91.

Fawad said the market has been ignoring "good compliance with the production cuts by OPEC and non-OPEC countries".

Venezuela's output dropped by 30,000 barrels a day to 1.68 million barrels.

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