Concerns about U.S. shale boom impact combined with hopes for re-balancing as a result of joint output reduction measures of major producers are still dominant features of the energy market.
Prices were steady on February 2 as optimism about joint efforts to prop up the market slightly outweighed the rivalry tendency of swelling drilling activity in the U.S.
The two contradictory trends largely neutralized each other with Brent crude increasing up 5 cents to stand at $56 and U.S. light crude set at $53.83 scaling 5 cents down from the previous close.
The indications that OPEC producers and other exporters are curbing output and comply with their reduction pledges is the main catalyst of prices.
The majority of the participating exporters have already begun implementing the deal, and reached an output reduction volume of nearly 1.4 million bpd in January. Russian Energy Minister Alexander Novak said that the country reduced its oil production by 117,000 bpd.
Prices were also supported by the fact that Washington put Tehran "on notice" in response to an Iranian missile test. Any response or intervention from the White House could cut Iranian crude supplies, sending oil prices higher.
With the lifting of international sanctions over its nuclear program, Iran has been rapidly boosting its oil exports, while exception from OPECâ€™s first production deal in eight years became an â€śenergy victoryâ€ť for the country.
However, U.S. crude production, the fact that is beyond OPECâ€™s control, raises concerns that effect of cuts could be reduced to zero. Crude oil inventories in the country, which is the world's biggest oil consumer rise last week by an unexpected 6.5 million barrels to 494.76 million barrels, largely exceeding expectations for an increase of 3.3 million barrels.