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Oil rises in choppy trade as Opec supply cuts vie with demand worry

Weaker-than-expected US factory data also added to economic worries


OMC, oil
Photo: Reuters

prices rose more than 1 percent on Thursday in volatile trade, drawing support from signs that is cutting crude output but pressured by concerns that slowing global economic growth could dent demand.

Brent crude futures gained $1.04 to settle at $55.95 a barrel, a 1.89 percent gain. US Intermediate (WTI) crude futures rose 55 cents to settle at $47.09 a barrel, a 1.18 percent gain.

Prices traded in a wide range, with Brent hitting a session high of $56.30 a barrel and a low of $53.93 a barrel. WTI posted a session high of $47.49 a barrel and a low of $45.35 a barrel.

Supporting futures were signs of reduced supply from members of the Organization of the Petroleum Exporting Countries. supply fell in December by the largest amount in almost two years, a survey found, as top exporter made an early start to a supply-limiting accord while and posted involuntary declines.

led by Saudi Arabia, alongside allied producers led by Russia, agreed last year to rein in supplies starting from January after prices tumbled from above $86 on worries about surging output.

"The Saudis are still spearheading a significant production cut that became official this week. Thus far, strong adherence to adjusted quotas appears a high probability," Jim Ritterbusch, of Ritterbusch and Associates, said in a note.

But gains were capped by concerns about a faltering global economy.

Tech giant cut its sales forecast, citing a slowdown in [.N] The news rattled US equity markets and weighed on oil prices, which at times track Wall Street.

Weaker-than-expected US factory data also added to economic worries.

"Oil is flip-flopping on concerns of supply and demand," said Phil Flynn, an at in "It's really a battle between the supply situation, which looks to be tightening, versus the possibility that demand will drop off."

US oil and gas executives' outlook turned negative for the first time since the low point of the last oil bust, according to results of a survey released on Thursday by the

Investors have been concerned about rising supply from top producers, including the and

US crude stocks fell last week, while gasoline and distillate inventories built, data from industry group the showed on Thursday.

Crude inventories fell by 4.5 million barrels in the week ended Dec. 28 to 443.7 million, compared with analysts' expectations for a decrease of 3.1 million barrels.

Gasoline stocks rose by 8 million barrels, compared with analysts' expectations in a poll for a 2 million-barrel gain. Distillate fuels stockpiles rose by 4 million barrels, compared with expectations for a 1.6 million-barrel gain, the data showed.

Official US government data is due to be released on Friday.

was expected to cut February prices for heavier crude grades sold to due to while reducing prices for light grades to keep Saudi oil competitive against rising US shale oil supplies, a survey showed on Thursday.

First Published: Fri, January 04 2019. 03:17 IST