By Sebastine Obasi, with agency report

Oil price went up, yesterday, but gains were said to be limited as investors gauged whether an increase in United States drilling rigs and record stockpiles might offset the existing push by producers to cut output and bring the market into balance.

Benchmark Brent futures were up 50 US cents at $56.31 a barrel, while US West Texas Intermediate crude rose 41cents to $53.81.

The increase showed that investors have taken Organisation Petroleum Exporting Countries, OPEC, members by their word on their commitment to cut production, and now hold more US crude futures and options than at any time on record.

However, evidence of rising output in the US has tempered money managers’ appetite to push prices higher. Since the start of February, oil prices have gained about $2.

“There is still a general consensus that the OPEC/non-OPEC agreement helps supply to get in line with demand. This bullish stance is countered by the ever-increasing inventories in the US and rising rig counts,” PVM Oil Associates strategist Tamas Varga. In 2016, oil cartel OPEC and other producers, including Russia, agreed to cut output by almost 1.8-million barrels per day during the first half of 2017. Estimates indicate that compliance with the cuts is about 90 percent. Top OPEC exporter Saudi Arabia’s crude oil shipments fell in December to 8.014-million barrels per day from 8.258-million barrels per day in November, official data showed on Monday.

“Sustained gains above $55 a barrel, and a hoped-for rally to $60 a barrel, [are] both proving incredibly tough nuts to crack,” said Jeffrey Halley, senior market analyst at futures brokerage Oanda in Singapore.

“At the crux of the matter is that 90 percent OPEC compliance is being balanced by ever-increasing US shale production,” he added.

US energy companies added oil rigs for a fifth consecutive week, Baker Hughes said on Friday, extending a nine-month recovery with producers encouraged by higher prices, which have largely traded above $50 a barrel since late November. “Assuming the US oil rig count stays at the current level, we estimate US oil production would increase 405,000 [barrels per day] between the fourth quarter of 2017 and the fourth quarter of 2016 across the Permian, Eagle Ford, Bakken and Niobrara shale plays,” Goldman Sachs said in a research note.