Crude oil halts four-week gain as OPEC cuts yet to be verified

NEW YORK (Bloomberg) -- Oil headed for its first weekly decline since December as traders waited for proof that OPEC and other producers would follow through on promises to cut production.

Futures slipped 1.2% in New York and were headed for a weekly drop of 3%. Saudi Arabia reduced output to less than 10 MMbopd and will consider renewing its pledge to trim supply in six months, according to Energy Minister Khalid Al-Falih. Still, until monthly production data is released, “these claims cannot be verified,” according to Commerzbank AG.

Oil has advanced since the deal among member of the Organization of Petroleum Exporting Countries and 11 other nations to temper global supply. It has been unable to sustain its rally above $55 amid concern that rising prices will spur more production. While Middle East producers including Saudi Arabia have signaled they’re sticking to the pledged reductions, the U.S. recently raised this year’s output forecast and explorers have added rigs for 10 straight weeks.

West Texas Intermediate for February delivery fell 53 cents to $52.48/bbl on the New York Mercantile Exchange at 11:30 a.m. in London. Total volume traded was about 11% below the 100-day average. The contract gained 76 cents to $53.01 on Thursday.

Saudi Cuts

Brent for March settlement slid 51 cents to $55.50/bbl on the London-based ICE Futures Europe exchange. The contract added 91 cents, or 1.7%, to $56.01 on Thursday. The global benchmark was at a premium of $2.20 to March WTI.

The caps on supply, together with rising demand and natural decreases in output in some countries, will help balance the market and support prices, Al-Falih said at an energy conference in Abu Dhabi on Thursday. Saudi production was last below 10 MMbopd in February 2015, according to data compiled by Bloomberg.