Oil prices extended declines on Monday, dragged down by signs of growing output in the United States that could partly offset output cuts by OPEC and other producers.
Uncertainty over the outlook for U.S policy also broadly weighed on financial markets after U.S. President Donald Trump introduced immigration curbs that sparked criticism at home and abroad.
But oil trading was quiet with several Asian countries- including China- on holiday for the Lunar New Year.
London Brent crude for March delivery had dropped 28 cents to $55.24 a barrel by 0417 GMT, after settling down 72 cents on Friday.
NYMEX crude for March delivery was down 27 cents at $52.90 a barrel.
The U.S. weekly oil and gas rig count from Baker Hughes showed that U.S. drillers added 15 oil rigs last week, bringing the total count to 566, the most since November 2015.
The Organisation of the Petroleum Exporting Countries and other producers, including Russia, agreed to cut output by almost 1.8 million barrels per day (bpd) in the first half of 2017 to relieve a two-year supply overhang.
“We are in wait-and-see mode, I suspect at the moment. Oil has reached a fair value equilibrium level given the current supply and demand outlook,” said Ric Spooner, chief market analyst at CMC Markets in Sydney.
“Until we get anything to really disrupt that, we may not see too much change,” he said, adding that the market may draw some comfort from official OPEC figures for January output.
Spooner said as with other financial markets, Trump’s ban on entry to the U.S. for refugees and citizens from seven Muslim countries had contributed to a risk-off attitude.
U.S. oil production has been rising, with the International Energy Agency forecasting total output growth of 320,000 bpd in 2017 to an average of 12.8 million bpd.
“The rise in U.S. output should not be unexpected,” ANZ bank said in a note.
“However we expect the reductions being made by OPEC will far exceed any rise in the U.S. and quickly reduce the global inventory that has been built up over the past two years,” the bank added.
Hedge funds and money managers boosted bullish wagers on oil to the highest level since mid-2014, Commodity Futures Trading Commission (CFTC) data showed on Friday, as agreed output cuts by the world’s top producers began to eat into a global glut.