Oil prices hold steady for third day; eyes on economic data

Oil prices were little changed for a third session on Tuesday, with investors searching for direction as concern over rising U.S. shale output offsets production cuts by OPEC and non-OPEC members.

Brent crude dipped 7 cents, or 0.1 percent, to $55.94 a barrel as of 0229 GMT, with a firmer dollar, which rose slightly against a basket of other currencies, putting some pressure on dollar denominated oil prices.

U.S. West Texas Intermediate crude eased 3 cents, or 0.1 percent to $53.17 a barrel.

"There's a lack of catalysts today possibly ... trading is around 25 percent of normal," said Michael McCarthy, chief market strategist at Sydney's CMC Markets.

"One could say that with oil holding up when other industrial commodities, equities and gold are weaker is quite a good performance. Everything else has caught the downdraft but oil is holding up," he said.

Investors are waiting on economic data later in the week, including import and export data from China on Wednesday, for trading cues, McCarthy added.

Adding to pressure on prices, the International Energy Agency (IEA) forecast U.S. shale output to grow at about 1.4 million barrels per day by 2022.

U.S. shale production would climb even if prices remain around $60 a barrel, while a rise to $80 a barrel could see shale oil output grow by 3 million barrels per day by 2022, the IEA said in its five-year "Oil 2017" market analysis.

Oil demand will also rise over the coming five years, crossing the 100 million bpd level in 2019 and hitting 104 million bpd by 2022, driven entirely by emerging economies, the report added.

Concerns over rising U.S. shale oil output have been offsetting the impact of production cuts agreed by the Organisation of the Petroleum Exporting Countries (OPEC) and some non-OPEC members to curb a global crude oversupply.

Russia and Iraq said on Monday it was too early to discuss if the pact by OPEC and non-OPEC members should be extended beyond May.

"It will depend on oil prices and market stability. If OPEC decides cuts, then Iraq will cut," Iraq oil minister, Jabbar Al-Luaibi, told Reuters at the CERAWeek energy conference in Houston.

Average oil prices are expected to be lower in the next 10 months of this year than in January and February due to a recovery in U.S. drilling activity, Fitch Ratings said in a report on Monday.