SINGAPORE Dec 22 Oil prices nudged higher in
tepid Asian trading on Thursday, supported by a weaker dollar
and optimism crude producers would abide by an agreement to curb
output to prop up markets.
But gains were capped by an unexpected rise in U.S. crude
inventories last week and as Libya said it expected to boost
output over the next few months.
U.S. West Texas Intermediate crude had risen 13 cents
to $52.62 a barrel by 0121, after closing the previous session
down 81 cents.
Brent futures for February delivery climbed 17 cents
to $54.63 a barrel, having previously finished 89 cents lower.
The dollar index, which tracks the greenback against
a basket of six rival currencies, slipped as investors took
profits after its rise to a 14-year peak of 103.65 earlier this
A weaker dollar makes greenback-denominated commodities
including oil cheaper for holders of other currencies.
"We're pretty close to the closing level - it'll be
interesting to see if the upward momentum is maintained as the
Europe and U.S. sessions open up," said Ric Spooner, chief
market analyst at CMC Markets in Sydney.
Russian Energy Minister Alexander Novak on Wednesday said
trust between oil producing countries is important if a global
deal to curtail output is to succeed.
"It is a safe assumption particularly in the early stages
that OPEC and non-OPEC producers will abide by the agreement to
curb output," Spooner said.
"If you look at where the biggest production cuts are coming
from its largely about the Gulf states and Russia - this gives
me even more comfort there will be material compliance," he
"Russia invested a lot in securing agreement so you wouldn't
expect them to fail to comply in the early stages. I think
compliance is likely."
Members of the Organization of the Petroleum Exporting
Countries (OPEC) led by Saudi Arabia and non-OPEC members signed
a deal earlier this month to cut oil output by almost 1.8
million barrels per day from Jan. 1.
Meanwhile, Libya's National Oil Corporation (NOC) said it
hoped to add 270,000 barrels a day to national production after
it confirmed on Tuesday that pipelines leading from Sharara and
El Feel fields had reopened.
Elsewhere, U.S. crude stocks posted a surprise build last
week, climbing by 2.3 million barrels compared with an expected
2.5-million barrels drop, the U.S. Energy Information
Administration said on Wednesday.
(Reporting by Keith Wallis; Editing by Joseph Radford)