Oil futures finished lower Monday as concerns over the potential for a sizable increase in U.S. crude production outweighed support from Saudi Arabia’s energy minister.

On the New York Mercantile Exchange, March West Texas Intermediate crude CLH7, -0.39% fell by 47 cents, or 0.9%, to settle at $52.75 a barrel. March Brent crude LCOH7, -0.47%  on London’s ICE Futures exchange lost 26 cents, or 0.5%, to $55.23 a barrel.

Oil prices had gained traction over the weekend after Saudi energy minister, Khalid al-Falih, voiced confidence that a major international deal to cut crude output was draining the market of excess supply. Al-Falih said members of OPEC and non-OPEC nations are showing “very good compliance.”

But unrelenting worries about production picking up in other regions that didn’t agree to curb output, including U.S. shale-oil producers, weighed on prices.

Bottom line, the Organization of the Petroleum Exporting Countries “continues to be successful in keeping fundamental short sellers on the sidelines,” but that “doesn’t change the fact that the outlook for oil remains bearish,” said Tyler Richey, co-editor for The 7:00’s Report.

According to OPEC officials, OPEC and 11 non-OPEC producers have already cut 1.5 million barrels a day from the global oil market—over 80% of the amount pledged.

Read: Oil-output cuts going better than expected, OPEC says

But “even though global oil ministers are saying that there is widespread compliance, we won’t know for another couple of weeks” with industry data due out next month to offer some proof of compliance with a production cut deal that went into effect at the start of the year, said Richey, in his latest daily report. Official OPEC January production data will be released in mid-February.

Rob Haworth, senior investment strategist at U.S. Bank Wealth Management, pointed out that an OPEC meeting over the weekend over the group’s compliance with production cuts didn’t offer an indication of “the volume of increased production from members such as Nigeria, Libya, Iraq & Iran, which would mitigate some of the production cuts.”

“Production cuts are priced into the market, but U.S. oil production and investment appear to be increasing and futures market speculation is reaching the highest level in two years,” he said, adding that “oil prices are somewhat vulnerable in the near term.”

Richey, meanwhile, said U.S. production has climbed by of 40,000 barrels a day, based on the four-week moving average for the lower 48 states. If U.S. production continues to rise at its current pace, then the “OPEC cuts will be effectively offset by Labor Day, resulting in a prolonged global production surplus,” he said.

Data from industry group Baker Hughes BHI, -0.02%  released Friday shows the number of working oil rigs in the U.S. climbed by 29 in the week ended Jan. 20 to a total of 551. Those figures point to a potential rise in oil production.

"Assuming the U.S. oil rig count stays at the current level, we estimate U.S. oil production would increase by 315,000 barrels a day between fourth quarter 2016 and fourth quarter 2017 across the Permian, Eagle Ford, Bakken and Niobrara Shale plays,” Goldman Sachs said in a note.

Goldman now forecasts oil production in the U.S. will grow by 265,000 barrels a day this year from last if the dormant rigs come back online between September last year and June.

Back on Nymex, prices for petroleum products were mixed. February gasoline RBG7, -0.56%  ended nearly flat at $1.567 a gallon, while February heating oil HOG7, -0.24%  fell 1.9 cents, or 1.2%, to $1.627 a gallon.

February natural gas NGG17, +0.09%  rose 3.9 cents, or 1.2%, to end at $3.243 per million British thermal units.

— Victor Reklaitis and Benoit Faucon contributed to this article.

http://www.marketwatch.com/story/oil-prices-steady-in-wake-of-saudi-comments-on-supply-2017-01-23