Oil rise around 1 percent on Saudi pledge to stabilise prices

By Meeyoung Cho

SEOUL (Reuters) - Crude oil futures rose around one percent on Tuesday, after Saudi Arabia pledged to work towards oil price stability, while a strong U.S. dollar and an expected rise in U.S. crude stocks limited the price rally.

Benchmark Brent futures for January contract climbed 38 cents or 0.85 percent at $45.21 a barrel as of 0121 GMT after it settled up 17 cents at $44.83 a barrel on Monday.

U.S. crude's West Texas Intermediate (WTI) futures increased 40 cents or 0.96 percent at $42.15 a barrel after hitting $42.18 a barrel earlier in the session. It finished down 15 cents at $41.75 on Monday.

"The focus is turning to the upcoming OPEC meeting and the hope that some production cuts will be forthcoming. OPEC member comments leading into the December 4 meeting are likely to continue to drive sentiment," ANZ said in a note on Tuesday.

Saudi Arabia led a shift by the Organization of the Petroleum Exporting Countries (OPEC) in November 2014 to defend market share against competing supplies, rather than cut output to prop up prices.

Saudi's cabinet said on Monday it was ready to cooperate with OPEC and non-OPEC countries to achieve market stability, days before OPEC meets to review its year-long policy of not supporting prices.

On Sunday Venezuelan oil minister said OPEC cannot allow an oil price war and must take action to stabilise the crude market soon. When asked how low oil prices could go in 2016 if OPEC doesn't change its policy, he said: "Mid-20s."

The ANZ note added that the markets are also eyeing any change in U.S. crude oil stocks with the market expecting a small increase.

Regarding U.S. commercial crude oil stocks, a preliminary Reuters survey with five analysts showed on Monday a crude stock build of 1.1 million barrels on average in the week ended Nov. 20, or a rise for a ninth consecutive week.

BNP Paribas said: "We still think that a low 40s NYMEX WTI is a floor from which the market can rally through the winter. Thereafter, the summer of 2016 presents down risk for oil prices as OPEC pursues its curent policy, U.S. production stabilises and Iran delivers more barrels to the market."

(Reporting by Meeyoung Cho; Editing by Michael Perry)