(Corrects paragraph 2 to 16-week high, not 14-week high)
* Saudi Arabia cuts oil output to just over 9 mln bpd
* Yemen oil pipeline blast halts main export flows
* China export growth in December higher than forecast
* Coming up: CFTC positions data 3:30 p.m. EST Friday
By Joshua Schneyer
NEW YORK, Jan 10 Oil futures rose on Thursday on
news that top world oil exporter Saudi Arabia had cut back
production in response to flagging demand, and after China
reported strong demand for its exports.
U.S. crude futures rose to a 16-week high of $94.70 a
barrel before settling at $93.82, up 72 cents on the day. Brent
crude rose as high as $113.29 a barrel before settling
at $111.89, up 13 cents.
OPEC's top producer slashed oil production by 700,000
barrels per day (bpd) to 9 million bpd during the last two
months of 2012, according to industry sources. Major customers
for Saudi crude said the cuts were driven by lower demand.
News of the Saudi supply curbs helped briefly push Brent
over $113 a barrel for the first time since mid-October, well
above the $100 a barrel price Riyadh has said it favors.
Oil and other markets also got a boost from Chinese trade
data that showed strong export growth rebound in December,
raising expectations of revived growth in the world's No. 2
economy that could drive more fuel demand.
Crude pared some gains after the Philadelphia Federal
Reserve Bank said its annual revisions showed that factory
activity in the U.S. mid-Atlantic region grew at a lower pace in
December than originally reported.
"The strong data from China indicates demand might be
improving there and the Saudis have cut back production, but the
downward revisions by the Philly Fed gave the market a little
pause," said Phil Flynn, analyst at Price Futures Group in
Gains in U.S. crude pushed the benchmark to a level of 67 on
the 14-day relative strength index. That is close to the 70 mark
that, according to traders who follow technical charts, can
indicate a commodity has been overbought.
U.S gasoline futures rose along with crude, but
heating oil futures in the New York Harbor fell by 0.6
percent to around $3.05 per gallon.
Traders attributed the fall to speculation that cargoes of
Russian gas oil may come to the Harbor. Physical oil traders
told Reuters that up to six cargoes may be headed for New York.
Also helping oil's advance on Thursday was news of a
pipeline explosion in Yemen that halted most of the country's
Flows of oil through Yemen's main crude export pipeline
stopped on Thursday after it was blown up by unknown attackers,
government and oil industry officials said.
"These three factors - Saudi Arabia, Yemen and the China
data - are all helping to push up the market," said Tamas Varga,
an oil analyst at broker PVM Oil Associates in London.
Saudi Arabia says it favors an oil price of about $100 a
barrel, but recent reports have suggested that the market is
well supplied and that output from some regions, particularly
North America, will grow rapidly over the next two years. U.S.
government data showed that domestic oil output rose above 7
million barrels a day last week for the first time since 1993.
"Short term, the Saudi output figures are bullish, but
longer term they are more bearish, because they suggest Saudi
Arabia sees the need to cut to balance the market," Varga said.
(Additional reporting by Robert Gibbons and Matthew Robinson in
New York, Christopher Johnson in London and Ramya Venugopal in
Singapore; Editing by Marguerita Choy; and Peter Galloway)