Oil prices edged lower in Asian trading Thursday after crude oil futures rose to a two-week high overnight amid signs of more OPEC output cut compliance.
Light, sweet crude for March delivery dropped 14 cents to US$55.23 in electronic trading on the New York Mercantile Exchange midmorning in Singapore.
Prices initially fell more than US$1 a barrel Wednesday after the U.S. Energy Information Administration reported a larger-than-expected build in gasoline stockpiles and a surprise increase in distillates.
But then futures rebounded as traders weighed other factors in the report and the possibility of colder weather in the U.S. The contract settled 33 cents, or 0.6 percent, higher at US$55.37 a barrel Wednesday in New York, the highest settlement since Jan. 9.
Oil prices also rose Wednesday after ConocoPhillips' Chief Executive Jim Mulva said that the company was firmly instructed to curb output in its Libya and Venezuela operations. The comments led some traders to abandon their skepticism that the Organization of Petroleum Exporting Countries would not enforce the production cuts announced late last year.
The ConocoPhillips story is another sign that OPEC is starting to comply more with cuts that were announced last year, said Phil Flynn, an analyst at Alaron Trading Corp. in Chicago.
Heating oil futures for February fell 0.04 cents to US$1.5835 a gallon (3.8 liters) while natural gas prices fell 10.1 cents to US$7.320 per 1,000 cubic feet.