Oil rises above $53 as Iraq close to full OPEC cut pledge

Bloomberg

US oil advanced to trade above $53 a barrel as Iraq said it’s close to implementing its share of pledged output curbs agreed with OPEC to trim bloated global inventories.
Futures rose as much as 1 percent in New York after dropping 0.9 percent on Monday. Iraq, the second-biggest OPEC producer, has reduced supply by 180,000 barrels a day and will cut a further 30,000 a day by the end of the month, Oil Minister Jabbar Al-Luaibi said in an interview. In the US, crude inventories probably expanded for a third straight week, according to a Bloomberg survey before government data on Wednesday.
Oil has held above $50 a barrel since the Organization of Petroleum Exporting Countries and 11 other nations agreed late last year to curb supply by about 1.8 million barrels a day. While Saudi Arabia says more than 80 percent of the targeted reduction has been implemented since the deal took effect Jan. 1, Goldman Sachs Group Inc. said oil prices above $60 will bring back more production, including from shale. US drillers last week added the most oil rigs since 2013.
“OPEC cuts trump rising US rig count for now,” said Bjarne Schieldrop, chief commodities analyst at SEB AB bank in Oslo. “Also, most people’s belief that shale will respond at $60 makes the $60 attractive for prices like honey for bees.”
West Texas Intermediate for March delivery gained as much as 52 cents to $53.27 a barrel on the New York Mercantile Exchange and was at $53.19 at 9:15 a.m. in London. Total volume traded was about 38 percent below the 100-day average. The contract fell 47 cents to $52.75 on Monday.

IRAQ CUTS
Brent for March settlement added as much as 57 cents, or 1 percent, to $55.80 a barrel on the London-based ICE Futures Europe exchange. The contract dropped 26 cents to $55.23 on Monday. The global benchmark crude traded at a premium of $2.47 to WTI.
While 90 percent of Iraq’s output cuts have come from fields operated by companies run by the federal government, Baghdad is also coordinating reductions with the semi-autonomous region of Kurdistan and international oil companies, Al-Luaibi said in London. It’s too early to say if the cuts could be extended beyond the initially agreed six-month term, he said. US crude stockpiles probably rose by 2.25 million barrels last week, according to the Bloomberg survey before an Energy Information Administration report.