* Strong dollar potentially weighs on crude oil demand
* Oil traders look for planned production cuts to
* Saudi Arabia expected to raise its Feb. crude prices for
By Henning Gloystein
SINGAPORE, Jan 4 Oil prices edged up on
Wednesday, recovering some losses from the previous day when the
U.S.-dollar hit a 14-year peak and weighed on crude markets.
U.S. West Texas Intermediate (WTI) crude oil futures
were trading at $52.58 per barrel at 0026 GMT, up 25 cents, or
0.5 percent, from the last settlement.
International Brent crude futures had yet to trade.
Traders said that the increase was due to a dip in the U.S.
dollar, making dollar-traded fuel purchases for countries using
other currencies at home slightly cheaper.
The move came after the dollar hit a 14-year peak on
the back of strong U.S. economic data.
Despite Wednesday's dip in the dollar, analysts expect the
greenback to remain strong in the near future.
"The dollar remains supported due to the fact that the Fed
has not only turned hawkish but it has already started its
policy tightening cycle, while the rest of the major central
banks are pretty much dovish across the board," said Fawad
Razaqzada, market analyst at futures brokerage Forex.com.
Analysts said moves in foreign exchange markets would likely
be a strong driving factor in crude markets, as investors weigh
the prospects of money markets over commodity futures.
In physical oil markets, all eyes are on plans by major oil
producers like the Organization of the Petroleum Exporting
Countries (OPEC) to cut crude supplies from this month in an
effort to end global oversupply that has dogged markets for over
Reflecting a tightening market, top oil exporter Saudi
Arabia is expected to raise official selling prices (OSP) for
all its crude grades to Asia in February.
OSPs for physically delivered crude to customers around the
world are a key indicator in determining the prices for crude
oil futures like Brent or WTI.
"Crude oil has risen... on expectations of reduced supply
excess," Razaqzada said.
(Reporting by Henning Gloystein; Editing by Richard Pullin)