Despite Promises To Cut, Iraq Raises February Oil Exports

As a result of the production cuts, oil prices have held steady in recent weeks even as US gasoline demand has tumbled and oil storage levels have risen.

However, oil has not been able to breakout of the tight range it has been stuck in for the most part of this year.

The country's crude oil output was 3.9 million bpd in January, Zanganeh had previously announced.

WTI light sweet crude was din the down 50 cents at $53.33 a barrel, in the middle of a stubborn trading range. To support this trend, Saudi Arabia has offered to reduce oil production even more if rival Iran caps its own output this year.

Gasoline stocks fell by 546,000 barrels, compared with analysts' expectations in a Reuters poll for a drop of 1.8 million barrels.

An early report from Reuters on OPEC February crude oil production indicates an increase in compliance with the cartel's quotas from 90% in January to 94%.

According to American petroleum Institute, US inventory increased by 2.5 million barrels in the week that ended 24 February. The number of drilling rigs increased 91 percent over the past nine months, to 602, Bloomberg reported this week, while production recently toppled 9 million barrels per day for the first time in about 11 months.

As OPEC and 11 other nations reduce supply in an effort to end a three-year glut, USA producers are ramping up and potentially offsetting the curbs.

During the first full year since the sanctions were lifted, Iran has boosted exports to its biggest Asian customers by almost 60 percent to 1.63mn bpd. April heating oil added less than a penny to $1.587 a gallon, poised for a loss of about 3.7% on the week. Even Russian production heading into next year is high.

The money managers' bullishness flies in the face of eight consecutive builds in US crude inventories, with new records set each week, but reflect expectations of a tightening global crude market, apparent in a tightercontango market structure across both NYMEX and ICE crude futures. Most publicly traded USA independent oil producers have raised their 2017 drilling budgets, and several major integrated oil companies have said they will boost onshore US drilling.