NEW YORK: Oil prices were little changed on Tuesday (Jan 17) as a decline in the US dollar and comments by Saudi Arabia that it would adhere to OPEC's commitment to cut output.
That offset forecasts that US and Russian producers would boost crude output later this year.
The dollar fell to a near six-week low against a basket of currencies after US President-elect Donald Trump said that the strong greenback was hurting US competitiveness.
A weaker greenback makes dollar-denominated crude less expensive for users of other currencies.
"The oil market is actually weaker than it looks because it is being propped up by the weak dollar," said Phil Davis, managing partner at PSW Investments in Woodland Park, New Jersey.
Brent futures lost 39 cents, or 0.7 per cent to settle at US$55.47 a barrel, while US West Texas Intermediate (WTI) crude gained 11 cents, or 0.2 per cent to settle at US$52.48 per barrel. Both contracts were up by US$1 earlier on Tuesday.
Oil drew some support earlier on Tuesday from top crude exporter Saudi Arabia, which said it would adhere strictly to its commitment to cut output under the agreement between OPEC and other producers, such as Russia.
Under the agreement, the Organisation of the Petroleum Exporting Countries (OPEC), Russia and other non-OPEC producers have pledged to cut oil output by nearly 1.8 million bpd, initially for six months, to bring supplies back in line with consumption.
Oil exports from Iraq's southern terminals, meanwhile, were down so far in January, according to loading data and an industry source, a sign that OPEC's second-largest producer is following through on the group's decision to cut output.
Crude price gains, however, were capped by forecasts for rising US and Russian production and scepticism that OPEC as a whole would comply with its commitment to reduce supplies.
US shale production is set to snap a three-month decline in February, the US government said on Tuesday, as energy firms boost drilling activity.
Russian oil production is expected to reach another post-Soviet record high in 2017 after a global deal to cut output expires at the end of June, according to a Reuters poll of analysts.
"Strong and rising production out of Libya, Iran, Iraq and Nigeria will be acting to negate impact of OPEC/Russia output curtailments," Jim Ritterbusch, president of Chicago-based energy advisory firm Ritterbusch & Associates, said in a note.