Brent rises above $112 as oversupply concerns ease

LONDON: Brent crude oil rose above $112 a barrel on Thursday, as concerns eased over a glut of supply in the market.

The Organization of the Petroleum Exporting Countries (OPEC) agreed on Wednesday to keep its production target unchanged at 30 million barrels per day (bpd) for the first half of 2014, despite Iran and Iraq setting high output targets for the year ahead, and Libya saying it hoped to resume full oil production in two weeks.

"For us, the OPEC meeting, and the decision to extend quotas, was a non-event," said Harry Tchilinguirian, global head for commodity markets strategy at BNP Paribas.

"We're looking at a situation that remains unchanged, where Saudi Arabia remains the swing supplier and the swing subtracter of oil."

Saudi Arabia is the world's largest oil exporter and has been pumping over 9 million bpd since early 2011 to make up for supply disruptions in other countries.

Brent crude oil for January delivery was up 18 cents at $112.06 a barrel at 1135 GMT. It lost 74 cents the previous session.

U.S. crude was 43 cents higher at $97.63 per barrel, after rising more than a dollar on Wednesday and more than 5 percent over the past four sessions.

Also boosting Brent crude oil prices were assurances from U.S. Secretary of State John Kerry to Israeli Prime Minister Benjamin Netanyahu that core sanctions against Iran would remain in place despite its interim nuclear deal with world powers.

U.S. STOCKPILES

U.S. crude oil was supported by data on Wednesday showing the country's crude stockpiles dropped for the first time in 11 weeks.

Figures from the Energy Information Administration (EIA) showed crude stocks fell by 5.6 million barrels in the week ended Nov. 29, cutting around one-sixth of the 36 million barrels that had built up over the previous 10 weeks.

Crude oil production in the United States dipped slightly last week but held above 8 million bpd, the data showed.

"The draw was the result of refinery runs climbing back above 16 million bpd for the first time since early September, as refineries ramped up runs after maintenance and on attractive margins," Energy Aspects said in a note.

Oil investors will keep an eye on U.S. third-quarter GDP numbers due at 1330 GMT and the November jobs report due on Friday for signs of improvement in the world's largest economy.

After an initial growth reading of 2.8 percent last month, a Reuters poll predicted a modest upward revision to 3 percent for GDP growth in the third quarter.

Data on Wednesday showed U.S. private employers added 215,000 jobs to their payrolls last month, the biggest increase in a year, leading to speculation payrolls could also be upbeat and perhaps prompt the Federal Reserve to start curbing its commodity-boosting monthly bond buying programme at its next meeting Dec. 17-18.