Oil eases from five-week top, rising U.S. production weighs

Saudi Arabia pared its oil production last month to the lowest since January, staying below the output level it pledged to maintain as part of a global deal to reduce crude supplies, according to a person with knowledge of the data.

Russian Federation was part of a deal between the Organization of the Petroleum Exporting Countries and other producing nations to cut output by 1.8 million bpd in the first six months of 2017.

Analysis of publicly available energy data has become especially relevant in the past months since OPEC is monitoring the implementation of oil production cuts by major oil producers of around 1.8 million barrels per day under the deal in order to stabilize the energy market and revive oil prices.

Brent for June settlement climbed as much as 28 cents, or 0.5 percent, to $55.52 a barrel on the London-based ICE Futures Europe exchange.

Nearly a dozen major producers in late 2016 agreed to curb their production for the subsequent six months to help bring global storage levels down to five-year averages.

Crude oil prices closed higher in futures market on Friday, extending a rally to the strongest level in around a month after the USA fired missiles at a Syrian government air base.

Crude prices continued to trade with upside bias, after last week's US missile strike on an airbase in Syria, underpinned a rally in oil prices, as investors anxious about potential supply disruptions in the region.

Both Brent and West Texas Intermediate oil price benchmarks declined over the course of the first quarter - to below US$52 per barrel for Brent and US$48 per barrel for WTI - but have recently rallied.

Russia's Energy Minister Alexander Novak told Bloomberg News on Friday that his ministry had spoken with oil producers about extending the deal with OPEC but said it was too early to decide on prolonging the deal.

"There's a lot of heightened geopolitical tension on two fronts", said Phil Streible, senior market strategist at RJO futures in Chicago.

He also said the widening discount of the current Brent crude price to the contract in the next month is "basically telling you the market is not actually that tight".

The tone comes amid lingering questions over ties between the Kremlin and supporters of U.S. President Donald Trump. US crude CLc1 was up 73 cents at $52.97.

Later Tuesday investors will be watching for a USA inventory and production estimate from the industry group the American Petroleum Institute.

The supply cut is supporting oil prices which are trading around $56 a barrel, up from $42 a year ago.

Despite hitting a five-week high, crude oil slightly inched lower during Tuesday's trading session on reports of a rising US shale oil production slightly pared the gains oil prices gathered due to the the tension in Syria.

  • Zachary Reyes