Oil prices slipped on Friday, giving up gains from earlier in the day, as the market shifted its focus toward production increases in the US from efforts by the Organization of the Petroleum Exporting Countries (OPEC) and other producers to support prices by cutting supplies.
Brent crude futures, the international benchmark for oil prices, were trading at $55.55 per barrel at 1050 GMT, down 69 cents from their last close.
US West Texas Intermediate (WTI) crude futures were at $53.30 a barrel, down 48 cents. 
“The market is really torn between a relatively healthy compliance from OPEC and non-OPEC countries on the one side, and an increase in US crude production on the other,” PVM Oil Associates analyst Tamas Varga said.
Prices had risen during Asian business hours, though activity was low due to the start of the Lunar New Year holiday in most countries of the region, including China and Singapore.
OPEC and other oil producers, including Russia, agreed to cut production by almost 1.8 million barrels per day (bpd) for the first half of 2017 to fight a two-year supply overhang.
But US oil production has been rising, with the International Energy Agency (IEA) forecasting total US production growth of 320,000 bpd in 2017 to an average of 12.8 million bpd.
Analysts said investors who bet on rising prices were taking profit in advance US rig counts due later in the day from oilfield services provider Baker Hughes, which could signal further increases in US production.
Oil research firm PetroMatrix said the rig count data, “will be a weekend risk as another surge will negatively impact the start of next week.”
There were fundamental factors that impacted prices this week, such as gains in Iran’s monthly oil exports in February and resilient production in Libya. A glitch in North Sea Buzzard crude production provided support.
But market participants warned of more volatility ahead as speculators were reacting to even small developments in the physical markets.
“Given that speculative net long positions in Brent and WTI are already at a record-high level, the correction potential is therefore growing all the time,” Commerzbank analyst Carsten Fritsch said in a note.

Source: Arab News