* U.S. crude prices up over 11 pct this week
* Drilling activity, crude inventories both fall
* Enterprise and Vitol plan first crude exports
* Overall market conditions remain weak
By Henning Gloystein
SINGAPORE, Dec 24 (Reuters) - U.S. crude prices continued
rising in early trading on Thursday, headed for an 11 percent
rise in the week leading up to Christmas, as the U.S. market
tightened on the back of falling supplies and looming exports.
Front-month West Texas Intermediate (WTI) crude futures
CLc1 were trading at $37.82 per barrel at 0032 GMT, up over
11.5 percent since Monday.
The strengthening market is a result of falling stocks,
reduced drilling activity, and looming exports following the
lifting of a 40-year old ban of U.S. crude exports.
On the production front, Baker Hughes (N:BHI) reported that U.S. oil
drillers cut rigs for a fifth week in the last six, a sign
drillers were waiting on higher prices before returning to the
well pad. WTI was little changed after the report.
"The current rig count is... pointing to U.S. production
declining sequentially between 2Q15 and 4Q15 by 320,000 barrels
per day," Goldman Sachs (N:GS) said.
In storage, U.S crude inventories fell 5.88 million barrels
to 484.78 million last week compared with a forecast rise of 1.4
million, the Energy Information Administration (EIA) said.
The tightening physical market came just as U.S. energy
group Enterprise and oil trader Vitol raced to exploit the end
of the ban on most U.S. crude exports, loading a 600,000-barrel
cargo of domestic light crude oil scheduled for the first week
of January, although the destination was not immediately clear.
Despite this week's bull-run of U.S. crude, overall market
conditions remain weak due to a global overhang in production
that sees between 0.5 and 2 million barrels of crude produced
every day in excess of demand, and analysts said it would take
time for the glut to be worked down.
"Energy prices are likely to rise slightly as production
slips, which will ease the current supply versus demand gap.
Demand growth should remain solid, but inventories will remain
an overhang to markets for much of the year," said Rob Haworth,
senior investment strategist at U.S. Bank Wealth Management.
U.S. crude prices have fallen over 10 percent since the
beginning of the month and remain almost two-thirds below
mid-2014 when prices began to tumble.