Crude futures were little changed Monday with front-month contracts unable to hold onto intraday highs that were near the top end of recent ranges where prices have been hovering.

NYMEX April crude settled 6 cents higher at $54.05/b, off an intraday high of $54.61/b. ICE April Brent settled 6 cents lower at $55.93/b after having traded as high as $56.77/b.

Signs of solid compliance by OPEC members with agreed cuts that went into effect January 1 have drawn speculative length into the market.

Money manager net length pushed further into record high territory, rising 21,796 contracts to 405,328 contracts, in the week that ended February 21, US Commodity Futures Trading Commission data showed Friday.

Speculative length has increased 27% over the last six reporting periods, likely a supportive factor for prices, but some analysts question whether that rate of growth can last.

"The latest record was driven by new long bets entering the market rather than short bets leaving it," TAC Energy said in a note.

"It's hard to argue against the herd at this point while crude oil prices are on the cusp of a technical breakout to the upside, but this category of trader is notoriously fickle, and if so much speculative money is already betting on higher prices, who is left to buy?" TAC Energy said.

Signs of growing US crude production and drilling activity could offset the impact of OPEC supply cuts, a scenario that has kept crude futures in a tight band so far this year.

US oil rig count has topped 600 for the first time since October 2015, and US production has increased above 9 million b/d for the first time since April 2016, Commerzbank analysts said in a note.

"This is another reason why the optimism shown by financial investors is excessive," they said.

Front-month NYMEX crude has settled so far this year in a $3.63/b corridor between $50.82/b and $54.45/b. Front-month ICE Brent has settled in a $3.46/b range between $53.64/b and $57.1/b.

"It would appear that OPEC has done a commendable job of stabilizing the market," although producers are likely targeting a price at $60/b or above, Jim Ritterbusch, president of Ritterbusch & Associates, said in a report.

"The longer that values stay below prices needed to drive budget improvement amongst the membership, the greater the likelihood of cheating that could force an eventual unraveling of the OPEC agreement," he said.

PROMPT NYMEX RBOB STRENGTHENS

NYMEX March RBOB settled up 1.79 cents at $1.5327/gal. NYMEX March ULSD settled down 5 points at $1.6399/gal.

Both March contracts will expire at the end of Tuesday's session, which could have drive some of the strength in the prompt NYMEX RBOB contract, said Gene McGillian, senior analyst at Tradition Energy.

"We're getting to the end of the month and gasoline has been the weakest fuel on the board over last month, so we might see some pre-expiration covering," he said.

NYMEX April RBOB was little changed, rising 52 points to $1.7417/gal. The front-month RBOB crack spread against WTI jumped from less than $10/b to over $18/b since last week when April became the front-month contract.

The strength in the April crack reflects "the idea that demand will pick up as we moving into the summer driving season," McGillian said.

US gasoline stocks sit just 2.6 million barrels below the record-high 259 million barrels set the week ending February 10, according to Energy Information Administration data.

--Geoffrey Craig, geoffrey.craig@spglobal.com

--Edited by Richard Rubin, richard.rubin@spglobal.com

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