* Peak summer U.S. driving season starts this week
* Financial traders cut WTI short positions to 2016 lows
* Rising Middle East output drags on international oil
markets
By Henning Gloystein
SINGAPORE, May 31 (Reuters) - U.S. oil prices were lifted
early on Tuesday by the start of the peak demand summer driving
season, although international fuel markets were weighed down by
rising output in the Middle East, which mostly serves Asian
customers.
U.S. West Texas Intermediate (WTI) crude oil futures CLc1
were trading at $49.50 per barrel at 0042 GMT, up 17 cents from
their last settlement.
Demand in North America is set to pick up along with the
official start of the U.S. summer driving season this week,
triggering a cut in the amount of open short crude positions
that would profit from falling prices.
"Investor positioning points to further support for
commodity prices as bearish bets continue to be reduced," ANZ
bank said on Tuesday.
The amount of outstanding managed short crude positions of
U.S. WTI crude futures 1067651MSHT fell to its lowest level
this year last week.
International oil markets, however, were hit by a rise in
Middle Eastern crude exports, most of which go to Asia.
Brent crude oil futures LCOc1 were trading at $49.65 a
barrel, down 11 cents from their last close.
Iraq will supply 5 million barrels of extra crude to its
partners in June, industry sources familiar with the issue said,
joining other Middle East producers by lifting market share
ahead of an OPEC meeting this week.
Iraq, which is the second-largest producer in the
Organization of Petroleum Exporting Countries, had already been
targeting record crude export volumes from southern terminals
next month of 3.47 million barrels per day.
Saudi Arabia, the world's top crude exporter, as well as
fellow OPEC producers Kuwait, Iran and the United Arab Emirates,
also plan to raise supplies in the third quarter in an ongoing
race for market share in the world's biggest consumer region,
Asia.