Oil prices fall on doubts over OPEC production cut compliance

Oil prices fell on Friday, reversing earlier gains, on concerns that not all OPEC producers will cut output in line with an agreement reached in November, and a stronger U.S. dollar.

Brent crude futures , the benchmark for international oil prices, were trading at $57.75 per barrel at 1443 GMT (9:43 a.m. ET), down 14 cents from the previous close after trading as much as 58 cents higher earlier in the day.

In the United States, West Texas Intermediate (WTI) crude futures were $53.74 a barrel, 3 cents below their last settlement, after trading as much as 56 cents above it.

"There's a lot of volatility, or at least changes in direction," ABN Amro senior energy economist Hans van Cleef said. "People think the long-term trend is up, but after a gain of a few dollars, they take profit."

The contracts are largely flat on the week.

While top exporter Saudi Arabia, along with fellow Gulf members Abu Dhabi and Kuwait, have shown signs of cutting production in line with an agreement reached by OPEC and other producers, market watchers have doubts about overall compliance.

Saudi Arabia cut output in January by at least 486,000 barrels per day (bpd) to 10.058 million bpd, fully implementing the agreement to curb a global supply glut. [nL1N1EV1GM]

State oil producer Saudi Aramco has started talks with customers globally on possible cuts of 3 percent to 7 percent in February crude loadings. [nL1N1EV1GM]

On Friday, a Kuwaiti oil official said that country had also reduced production in line with the deal, and there are also reports of supply cuts from Abu Dhabi. [nL1N1EV1GM][nL4N1EV1PI][nL5N1EW1SB]

But there are still doubts about other producers' compliance.

"There will be some countries who will cheat...we expect zero compliance from Baghdad... And we definitely do not expect the Kurds to join in, given that they are autonomous from the federal government," Energy Aspects said in its 2017 oil market outlook, published this week.

Iraq Prime Minister Haider al-Abadi said this week the autonomous Kurdish region was exporting more than its allocated share of oil. Iraq is the Organization of the Petroleum Exporting Countries' second-largest producer. [nL5N1ET320]

Overall supply from OPEC in December fell only slightly to 34.18 million barrels per day (bpd) from a revised 34.38 million bpd in November, according to a Reuters survey this week based on shipping data and information from industry sources. [nL5N1EU34H]

Analysts also said the strong dollar, which edged higher on Friday following U.S. jobs data, capped oil prices, as it made oil more expensive for holders of other currencies. [MKTS/GLOB]

(Additional reporting by Henning Gloystein in SINGAPORE and Osamu Tsukimori in TOKYO; Editing by Elaine Hardcastle and Susan Thomas)