Oil rises further above $52 on tighter US fuel stocks

Global benchmark Brent rose 39 cents to $52.42 by 0859 GMT, with US crude up 57 cents at $51.01

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Oil climbed further above $52 a barrel on Friday, supported by a drop in US fuel inventories, though gains were kept in check by ample crude supplies even as OPEC plans to cut output.

Brent crude reached a 2016 high near $54 on Monday, underpinned by OPEC’s Sept. 28 deal to reduce oil production, before weakening on rising US crude stocks and as the Organization of the Petroleum Exporting Countries’ own numbers showed output is still rising.

Global benchmark Brent rose 39 cents to $52.42 by 0859 GMT, with US crude up 57 cents at $51.01.

US inventories of distillates, which include diesel and heating oil, fell by 3.7 million barrels, the government’s weekly supply report said on Thursday. Gasoline stocks fell by 1.9 million barrels.

“The end result was slightly positive,” Stephen Brennock, of broker PVM, said in a report, referring to Thursday’s US supply data. The rise in crude stocks was “more than offset” by lower fuel inventories, he said.

Stocks at the Cushing delivery hub for US crude also declined, but crude inventories overall rose by 4.9
million barrels, the first increase in six weeks.

Lack of detail

OPEC’s plan is to cut its supply to between 32.5 million barrels per day (bpd) and 33 million bpd to help to balance supply and demand and revive prices that remain less than half of the levels reached in mid-2014.

However, a lack of much detail in the initial agreement, such as how much each of the 14 members can pump and the scale of any contributions from non-OPEC countries such as Russia, has left analysts sceptical.

OPEC’s own monthly report on Wednesday put production at 33.39 million bpd in September.

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