Tokyo: Oil prices pared early gains to stay little changed on Thursday as Opec’s (Organization of the Petroleum Exporting Countries) strong compliance with a supply reduction pact offset news that US production topped 10 million barrels per day (bpd) for the first time in nearly half a century.

NYMEX crude for March delivery was unchanged at $64.73 a barrel by 0748 GMT, after ending the last session up 0.4%.

London Brent crude for April delivery was down 1 cent at $68.88 a barrel, after settling up 3 cents in the previous session.

US crude oil production in November surpassed 10 million bpd for the first time since 1970, and neared the all-time output record, the Energy Information Administration said on Wednesday.

“As oil prices rise, higher shale output is definitely on the market’s mind," said Tomomichi Akuta, senior economist at Mitsubishi UFJ Research and Consulting in Tokyo.

Oil output by Opec also rose in January from an eight-month low as higher output from Nigeria and Saudi Arabia offset a further decline in Venezuela and strong compliance with a supply reduction pact, a Reuters survey found.

However, adherence by producers included in the deal to curb supply rose to 138% from 137%in December, the poll found, suggesting commitment is not wavering even as oil prices hit their highest level since 2014.

“Opec nations realise that lower production would buoy oil prices and that it’s better for them," Akuta added.

Oil prices are unlikely to advance much above $70 a barrel in 2018, with the market caught between the opposing forces of Opec-led production cuts and surging US output, a Reuters poll showed on Wednesday.

Oil prices initially slipped on Wednesday after US Energy Information Administration (EIA) data showed that US crude inventories rose by 6.8 million barrels last week, after 10 straight weeks of declines.

But prices rebounded on the back of a surprise 2 million barrel drawdown in gasoline stocks, helping push up gasoline futures.

Distillate stockpiles, which include diesel and heating oil, fell by 1.9 million barrels, versus expectations for a 1.5 million barrel drop, the EIA data also showed.

China’s domestic oil product demand will rise by around 3% this year and its gasoline consumption will hit a peak between 2025 and 2030, state oil company Sinopec Group said in its annual outlook on Thursday. Reuters

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