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Oil prices flatlined on Monday as investors priced in whether a rise in U.S. drilling rigs and a build in U.S. inventories would subvert efforts by crude exporters to lower their production and rebalance the markets.
Brent futures were trading down 5 cents at $55.75 per barrel. Meanwhile. U.S. WTI crude futures was flat at $53.40 per barrel. Both contracts slightly advanced in early trading.
Analysts said that sustained rally above the $55 per barrel mark and a seen rise to $60 per barrel are developments that are proving to be challenging for both the Brent and the U.S. WTI.
They added that in essence, the continuously rising production in the U.S. front has been counterbalanced by the OPEC's 90 percent compliance of its agreed cuts.
Aside from the estimated high rate of compliance, sentiment was also lifted by a Reuters report last week that the producer cartel could decide to extend the historic deal or even choose to push through with deeper output cuts throughout the second half of the year if the initial cuts were not strong enough to dent the oversupply in the market.
