Oil futures headed lower on Wednesday (18 January) as traders reconciled the impact of a higher oil price and its positive impact on US shale production.
At 5:21pm GMT, the Brent front month futures contract was 1.24% or 69 cents lower at $54.78 per barrel, while the West Texas Intermediate (WTI) was down 1.30% or 67 cents at $51.81 per barrel.
Market sentiment was fed by the US Energy Information Administration's (EIA) observation that the country's shale producers were on course to snap a three-month decline in February, as energy firms hedge a higher oil price and boost drilling activity in light of $50-plus prices.
According to the statistics body's latest projections, February production will edge up 40,750 barrels per day (bpd) to 4.748 million bpd, reversing an earlier forecast of a 5,900 bpd decline.
Meanwhile, speaking at the 2017 World Economic Forum in Davos, Switzerland, BP's chief executive Bob Dudley said his company was gearing up to manage its books on a $55 per barrel oil price.
"I think there will still be volatility in the markets but the agreement on 30 November, 2016 is clearly a milestone in the industry. If you look at what is happening around the world in terms of reductions of output, it does appear real. We're planning this next year on $55 right now as a company," Dudley told Bloomberg television.
Away from the oil market, major precious metals stayed in positive territory, albeit gains were largely muted. At 5:40pm GMT, the Comex gold futures contract for February delivery was up a mere 0.20% or 30 cents at $1,213.10 an ounce, as the US dollar strengthened.
Concurrently, Comex silver was up 0.87% or 17 cents to $17.32 an ounce, while spot platinum was down 0.40% or $1.05 to $972.05 an ounce. Kit Juckes, head of forex at Societe Generale and IBTimes UK columnist, said incoming US President Donald Trump's observation that he would prefer a weaker dollar and Federal Reserve Chair Janet Yellen upcoming speech, weighed on the dollar which in turn kept precious metals near overnight highs.
"Trump, as far as anyone can tell, would quite like a weaker dollar and higher rates. But it's the policy choices he makes rather than his personal preferences that will determine what actually happens once he takes office on Friday."