LONDON - Oil rose above US$59 a barrel on Tuesday after the United Arab Emirates told buyers it will cut exports next month, tempering scepticism that Opec members will implement pledged cutbacks.
An industry source said the Abu Dhabi National Oil Company, the main UAE producer, had told customers it
would cut all crude exports by about 5 per cent. The UAE pumps about 2.6 million barrels per day.
"Over the weekend we had the Saudis informing of cuts and now the UAE is doing the same," said Olivier Jakob of Petromatrix. "We're getting confirmation that some of the cuts are for real. "mber supply.
But other members have yet to provide similar evidence. With oil still high by historical measures - up from below US$20 in January 2002 - some doubt their commitment to cut.
"Opec adherence remains to be seen," said Angus McPhail of investment company Alliance Trust.
Oil in New York has fallen from a record of US$78.40 reached in July, pressured by rising inventories and easing concern about real and threatened supply disruptions.
Barclays Capital technical analysts said in a research note a swift price rebound was unlikely.
"Major damage has been done to the long-term uptrend and it is unlikely oil will make a rapid recovery. Expect weakness to eventually extend towards US$55 but thereafter we would be looking to reinstate a strategic long position," they said.
Traders are also watching weather forecasts for regions such as the US Northeast, the world's biggest heating oil consumer, for indications of winter fuel demand.
Private forecaster WSI Corp. on Monday predicted states in the Northeast should see warmer-than-normal temperatures in November before cooling down in December and January.
Analysts expect an increase in crude inventories, which are already well above seasonal norms, when US weekly oil stocks data is published on Wednesday.
Crude stockpiles likely rose another 2.4 million barrels last week as refinery maintenance kept feedstock demand low, according to a preliminary Reuters poll of analysts.
Distillate stocks, which include heating oil, were seen falling by 1 million barrels and petrol by 500,000 barrels.
- REUTERS
