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UPDATE 2-Oil edges up on tighter US fuel market; doubts over OPEC cuts weigh

Published 2016-10-14, 02:55 a/m
© Reuters.  UPDATE 2-Oil edges up on tighter US fuel market; doubts over OPEC cuts weigh
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* Technical indicators attract financial traders

* Doubts over planned OPEC-led cuts still weigh on crude (Adds comment, updates prices)

By Henning Gloystein

SINGAPORE, Oct 14 (Reuters) - Oil prices edged up on Friday, pushed by a tighter U.S. fuel market and as technical indicators attracted buying from financial players, but doubts over the feasibility of a planned production cut still weighed on markets.

Following a dip in early trading, international Brent crude futures LCOc1 were trading at $52.18 per barrel at 0643 GMT, up 15 cents, or 0.29 percent from their previous close.

After falling below $50 a barrel on Thursday, U.S. West Texas Intermediate (WTI) crude CLc1 was trading at $50.78 per barrel, up 34 cents or 0.67 percent from its last close.

Traders said the U.S. price rise was due to a tightening fuel market.

"Oil prices rose overnight despite rising stockpiles in the U.S., as fuel supplies in the U.S. fell to the lowest level this year," ANZ bank said in a morning note on Friday.

The U.S. Energy Information Administration reported a drop of 3.7 million barrels for distillates late on Thursday, which include diesel and heating oil, and a 1.9-million barrel decline for gasoline. EIA/S

However, U.S. crude stocks USOILC=ECI rose for the first time in six weeks, swelling by 4.9 million barrels in the week to Oct. 7 to 474 million barrels.

Outside the United States, traders said that Brent prices were being supported by technical indicators, which had attracted investment from financial market participants.

Reuters' technical analyst Wang Tao said Brent could test resistance at $52.49 per barrel, a break above which could lead to a gain to $53.45.

The price rises came despite rising doubts that a planned oil output cut by the Organization of the Petroleum Exporting Countries (OPEC) and potentially non-OPEC member Russia would be sufficient to rein in a global production overhang standing at around half a million barrels per day (bpd) in excess of consumption.

"Oil prices continue to trend up despite our doubts around OPEC's dubious return to the quota system," U.S. bank Jefferies said on Friday.

"Talk of cutting output in some quarters appears to be morphing into talks of a freeze in supply. We are doubtful that OPEC's efforts, even if successful in achieving a targeted 32.5 million bpd in collective output, will prove sufficient to materially alter the global oil balance and deliver a substantial reduction in oil inventories," French bank BNP Paribas (PA:BNPP) said in a note to clients.

OPEC's crude oil production stood at a record 33.6 million bpd in September PRODN-TOTAL .

<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ GRAPHIC-Global oil supply and demand balance

http://tmsnrt.rs/2dKkcHe GRAPHIC-Brent technical analysis

http://tmsnrt.rs/2em4Yrk

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