Oil slips on doubts that output cut will be deep enough to end glut

SINGAPORE - Oil prices slipped on Wednesday on persistent doubts whether a planned crude production cut led by OPEC and Russia would be deep enough to end a supply overhang that has dogged markets for over two years. International Brent crude futures LCOc1 were at $53.76 per barrel at 0642 GMT, down 17 cents, or 0.32 percent, from their last close. U.S. West Texas Intermediate (WTI) crude futures CLc1 were down 24 cents, or 0.45 percent, at 50.70 per barrel. Oil prices shot up as much as 19 percent after the Organization of the Petroleum Exporting Countries (OPEC) and Russia last week announced they would jointly cut production next year in an attempt to prop up markets. However, doubts have since emerged whether the planned cuts will be big enough to end oversupply. Since the deal was announced, both OPEC and Russia have since reported record production. "With both Russia and OPEC producing at record (levels), the market is scratching its head about how both blocs will manage to comply with the Vienna production cut targets," said Jeffrey Halley of brokerage OANDA in Singapore. "The point is valid, as the more OPEC and Russia produce, the higher the starting point will be to have to cut from." OPEC and non-OPEC oil producers will meet this weekend in Austria's capital to agree details of the output cut, which targets an overall reduction of around 1.5 million barrels per day. Despite the scepticism around implementing the cuts, analysts said 2017 will likely see a more balanced market. "Oil markets are on track to tighten over 2017, which will be accelerated by OPEC's decision to reduce production alongside non-OPEC countries," said BMI Research. "If effectively implemented, we expect the global oil market will return to balance in Q1 2017." Oil production has been outpacing consumption by 1 to 2 million barrels per day since late 2014. -Reuters