By Ahmad Ghaddar
LONDON (Reuters) - Oil prices fell on Wednesday on expectations that U.S. producers would boost output, while OPEC signalled a drop in the global oil supply surplus this year as the producer group's output fell back from a record high.
Brent crude futures, the international benchmark for oil prices, were down $1.05 at $54.42 a barrel at 1455 GMT.
U.S. West Texas Intermediate (WTI) crude oil futures were trading down $1 at $51.48 per barrel.
U.S. shale production is set to snap a three-month decline in February, the U.S. Energy Information Administration said on Tuesday, as energy firms boost drilling activity with crude prices hovering near 18-month highs.
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February production will edge up 40,750 barrels per day (bpd) to 4.748 million bpd, the EIA said. In January, it was expected to drop by 5,900 bpd.
"It's the eternal question about the current flat price and what it does to U.S. crude oil production," Petromatrix oil strategist Olivier Jakob said.
The Organization of the Petroleum Exporting Countries, excluding Indonesia, pumped 33.085 million barrels per day (bpd) last month, according to figures OPEC collects from secondary sources, down 221,000 bpd from November, OPEC said in a monthly report on Wednesday.
The figures showed the biggest reduction came from Saudi Arabia, which told OPEC it cut output to 10.47 million bpd.
OPEC cut its forecast of supply in 2017 from non-member countries following pledges by Russia and other non-members to join OPEC in limiting output.
OPEC now expects non-OPEC supply to rise by 120,000 bpd this year, down from growth of 300,000 bpd forecast last month, despite an upwardly revised forecast of U.S. supply.
Under the agreement, OPEC, Russia and other non-OPEC producers have pledged to cut oil output by nearly 1.8 million bpd, initially for six months, to bring supplies back in line with consumption.
The output cuts agreed by OPEC and others are likely to come largely from field and refinery maintenance, BMI Research said in a note. It said oil producers are expected to use lower volumes needed for domestic power generation in a bid to maintain export volumes.
"Sticking to output targets is important but export volumes from the participating countries are a much better indicator of how the cuts will affect the market," it said.
"Participating members are keen not to sacrifice vital export revenue so are trying to find ways to limit domestic crude usage in order to prioritise filling their contracts to foreign refiners."
A committee responsible for monitoring compliance with the agreement meets in Vienna on Jan. 21-22.
(Additional reporting by Naveen Thukral in Singapore. Editing by Jane Merriman and David Evans)
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