Oil falls on rise in United States drilling, selling ahead of OPEC report

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"We see the onset of a more bullish sentiment emerging in the market", added the secretary general.

OPEC has had a strong start in 2017 in reducing output to increase oil prices.

Opec has cut oil production by around 1.1m barrels a day as part of its promise to curb output in January, the cartel said in its monthly oil market report on Monday.

OPEC has predicted global demand to continue to grow to 1.3 million barrels a day this year, which combined with sustained OPEC output cuts should serve to balance supply and demand in the market. Nigeria, Libya and Iran were exempt.

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Oil prices wavered between modest gains and losses Wednesday morning ahead of official data expected to show an increase in USA crude stockpiles.

The new forecast comes after a recent commitment by OPEC countries and 11 non-OPEC countries to reduce production in a bid to manage supply and demand levels better. It's not so much that it makes the US inventories unwieldy.

That increase in rig count has had a marked impact on expectations for supply growth out of the U.S. Most notably, there has been a flurry of activity in the U.S.' most prolific basin, the Permian in Texas and New Mexico.

Here is a look at how share prices for two blue-chip stocks and two exchange traded funds reacted to this latest report.

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The Energy Information Administration or EIA's Petroleum Status Report for the week will be released at 10.30 am ET. The U.S., as a whole, produces just shy of 9 million b/d.

"OPEC producers want the market to believe they will stick to the agreed production freeze (cut)". The iShares MSCI Saudi Arabia Capped exchange-traded fund (KSA) is higher by almost 1% today and this week.

With numbers like those coming from the US, worries about market share are likely to resurface, which in turn may push major producers to refuse from the cut deal. Investors must note that OPEC had achieved a 90% plus compliance level after Saudi Arabia and Qatar reduced more than their agreed production quota. Later in December, Russia and other producers outside the group committed to take 558,000 barrels a day out of the market.

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