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OIL PRICES EDGE DOWN ON DATA SHOWING PRODUCTION GAIN, STRONGER DOLLAR "Credit News 24"

Investor concerns over rising output and falling compliance among OPEC members

Oil prices pulled back on Monday, weighed down by a strong dollar and data pointing to rising global production.

November West Texas Intermediate crude fell 96 cents, or 1.9%, to $50.70 a barrel on the New York Mercantile Exchange. The front-month contract was up about 2% for last week, up 7.7% for September and logged a quarterly rise of 10.5%, according to FactSet data. Based on the most-active contracts, however, prices were up around 12% from the August WTI settlement of $46.04 at the end of June.

December Brent crude , the global oil benchmark, fell 95 cents, or 1.6%, to $55.84 a barrel on London's ICE Futures exchange. The November contract, which expired at the Friday's end, gained roughly 1.1% for last week, 8.8% for the month and 16.6% for the quarter.

Investors are growing concerned about a recent Reuters poll showing output among the Organization of the Petroleum Exporting Countries rose by 50,000 barrels a day in September as the cartel's overall compliance with its supply-cut deal fell to 86%.

Several countries such as Saudi Arabia and Angola bore the brunt of the cuts while other countries such as United Arab Emirates, Ecuador and Iraq engaged in a bit of free riding, only complying by 30%, say analysts.

"Weak production discipline within OPEC and the cut exemptions for Libya and Nigeria should mean in our view that closely observed OECD stocks will not fall quite as quickly as expected," said Commerzbank analysts in a recent report.

A resurgent dollar also took a toll. As oil is priced in dollars, it becomes more expensive for holders of other currencies as the greenback strengthens.

"It is not surprising to see some investors taking the chips off the table especially given the stronger dollar and possible higher U.S. oil production going forward and definitely OPEC's production increases as well," said Eugen Weinberg, head of commodities research at Commerzbank.

Recently oil had been gaining based on newfound optimism about OPEC's ongoing effort to rebalance the market and eliminate about 2% of global supply with the help of external producers such as Russia.

Title : OIL PRICES EDGE DOWN ON DATA SHOWING PRODUCTION GAIN, STRONGER DOLLAR "Credit News 24"
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