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Oil edges up as OPEC ignores Trump pushback on prices

By Laila Kearney
Drilling rigs are parked up in the Cromarty Firth near Invergordon, Scotland, Britain January 27, 2015. REUTERS/Russell Cheyne/Files

By Laila Kearney

NEW YORK (Reuters) - Oil futures rose slightly on Tuesday after news that OPEC planned to continue production cuts despite comments from U.S. President Donald Trump, who criticized the producer group for rising crude prices a day earlier.

Prices fell more than 3.5 percent on Monday, their biggest daily percentage drop this year, after Trump said he wanted the Organization of the Petroleum Exporting Countries to ease its efforts to boost oil prices.

An OPEC source told Reuters on Tuesday OPEC would stick to its agreement and push for more adherence from its members and producer allies to tighten crude supplies regardless of Trump's recent tweet.

The OPEC source said the cartel, along with non-member producers, would continue its supply-cut agreement to balance the market until they see inventories fall to their five-year average. "There is no doubt we will continue with our reduction as planned," the OPEC source said.

Brent crude futures, the global benchmark, rose 45 cents to settle at $65.21 a barrel. U.S. West Texas Intermediate crude futures were up 2 cents to settle at $55.50 a barrel.

Prices extended gains in post-settlement trade after the industry group American Petroleum Institute reported U.S. crude inventories fell more than expected last week.

Crude stocks dropped by 4.2 million barrels in the week ending Feb. 22 to 444.3 million, API data showed.

Analysts expected a 2.8 million barrel build. Crude stocks at the Cushing, Oklahoma, delivery hub rose by 2 million barrels.

"After yesterday's pullback, the market is trying to stabilize again," said Gene McGillian, vice president of market research at Tradition Energy in Stamford, Connecticut. "We're basically turning our focus back to expectations of the producer output cuts and also the sanctions on Venezuela continuing to tighten supplies," McGillian said.

Oil prices have risen about 20 percent since the start of the year largely on an agreement by OPEC and non-member producers, including Russia, to reduce production. Supplies from Venezuela have been curtailed since U.S. sanctions were imposed to try to oust President Nicolas Maduro.

OPEC+ agreed in December to cut supply by 1.2 million barrels per day from Jan. 1 for six months. Saudi Arabia, OPEC's top producer, recently estimated its supply would fall in March by a half-million more barrels a day than anticipated under the supply-reduction agreement.

Libya's internationally recognised government agreed with the state oil company to reopen the country's largest oilfield, El Sharara, according to a statement on Tuesday, weighing on prices.

(Reporting by Laila Kearney; Additional reporting by Alex Lawler in London; Koustav Samanta in Singapore and Colin Packham in Sydney; Editing by Lisa Shumaker and Tom Brown)