LONDON: Oil prices rose on Tuesday, helped by signs that oversupply in the global market may be moderating ahead of a November meeting of OPEC producers that aims to curb crude oil output.
A proposal by the Organization of the Petroleum Exporting Countries to cut or cap output helped lift crude prices above $50, but not much more because market participants doubt the cartel's ability to strike and implement a concrete deal.
Now, several analysts have said a two-year global supply glut that more than halved prices could be receding in any case, if the latest oil inventories are taken into account.
They say stocks are not as high as usual ahead of the winter season. Brent crude rose 46 cents, or 0.8 percent, to $52.00 a barrel by 1330 GMT. US West Texas Intermediate (WTI) crude was up 53 cents, at $50.47.
Analysts at Bernstein Energy pointed to a slower build in global oil inventories.
"Global oil inventories (industry and government) increased by 17 million barrels to 5.618 billion barrels in 3Q16.
This is the smallest build since 4Q14, confirming that inventory builds are slowing as the market comes back into balance," it said.
Citi Bank pointed to an overall drop in inventories in the United States, Japan, Singapore and Europe of 35.9 million barrels. Analysts at Wood Mackenzie have forecast a balanced market by the end of the year.
BULLISH BETS
Traders are taking note, with money managers raising their bullish bets on US crude prices to the highest level since the slump started in 2014.
JBC Energy said October tanker fixtures from the Gulf reached a five-year high, which could be due to physical traders buying additional storage before November to offset further price rises should OPEC take effective action. OPEC meets on Nov. 30 to discuss a cut of about 1 million barrels per day (bpd) from its record 33.6 million bpd September output.
OPEC's secretary general said the 14 member countries should be able to strike a deal without too many disagreements.
Contributing to OPEC's output has been Iran's rising exports -- its October crude exports are set to hold near five-year highs at about 2.56 million bpd, a source with knowledge of its preliminary tanker schedule said.
While there has been focus on the supply side of the global market, concerns remain about demand, particularly in Asia, a pillar of demand growth in recent years.
In China, the trade environment will remain weak for the remainder of 2016, the commerce ministry said on Tuesday and in India, fuel demand fell in September.
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