REUTERS - Oil prices rose on
Tuesday, supported by strong demand in Asia and supply cuts by Abu Dhabi,
Kuwait and Qatar as part of production curbs organized by
OPEC and other
exporters.
But traders said the
market was pressured by investors closing financial positions that profited
from strong gains the day before.
International Brent
crude LCOc1 and U.S. West Texas Intermediate (WTI) CLc1 flirted with negative
territory in early European trading. By 1420 GMT, Brent was up 40 cents at
$56.09 a barrel, while WTI was up 34 cents $53.17.
Traders said there
was significant profit-taking after oil shot to mid-2015 highs earlier this
week following a deal reached by the Organization of the Petroleum Exporting
Countries and other exporters led by Russia to cut output by almost 1.8 million
barrels per day (bpd).
But they added that
oil markets were still broadly supported by the arrangement to crimp output.
"The market is
putting a lot of importance on the commentaries coming out of OPEC and non-OPEC
(and) the market is giving OPEC the benefit of the doubt that cuts will be
implemented and achieved," said Michael McCarthy, chief market strategist
at Sydney's CMC Markets.
However, analysts
warned prices would turn fast if the market believed compliance was lacking.
"The plan was
designed on Nov. 30. The foundation was laid down on Dec. 10. The construction
will start on Jan. 1. The following three to six months will provide us with an
answer as to whether the foundation is strong enough to hold the building or
will it collapse like a house of cards," PVM analysts wrote.
In a sign that
producers are acting on their plans to cut output, Abu Dhabi National Oil Co
told customers it would reduce Murban and Upper Zakum crude supplies by 5
percent and Das crude exports by 3 percent.
Kuwait Petroleum
Corp notified customers of a cut in contractual crude supplies for January, as
did Qatar Petroleum.
Meanwhile, China's
November crude output fell 9 percent from a year earlier to 3.915 million bpd,
data showed on Tuesday. Production recovered from October's 3.78 million bpd,
however, which was the lowest in more than seven years.
China's refinery
throughput hit a record in November of 11.14 million bpd, up 3.4 percent
year-on-year.
"Declines in
Chinese ... crude oil output and expansion of its strategic crude reserves
underpin our view for China's crude oil imports to strengthen," BMI
Research said.
In India, fuel
demand rose 12.1 percent year-on-year in November.
REUTERS
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