Traders also sold Brent to unwind bets on its
spread with West Texas Intermediate (WTI) crude as a new
pipeline and year-end crude stock drawdowns could reduce supply
at WTI's delivery point in Cushing, Oklahoma.
Brent crude for January edged up 14 cents to $109.53 a barrel by
0315 GMT. The contract slipped nearly 2 percent on Monday, the
biggest daily loss since Nov. 1.
U.S. crude futures for January delivery was at $97.52 a barrel,
up 18 cents, after its first decline in seven sessions on
Recent Chinese data put to rest fears about a hard-landing for
the economy, while government reforms are expected to support
demand for commodities such as energy and metals, Mark Keenan, a
commodity strategist at Societe Generale in Singapore said.
"Closer to the Brent market, the German data has highlighted a
reasonably disjointed recovery within Europe," he said. "Hence,
we saw a pretty strong move yesterday combined with the
reduction in speculative activity on Brent-WTI spread."
Germany's trade surplus narrowed in October while industrial
output unexpectedly fell, signalling a mixed start to the fourth
quarter for Europe's biggest economy.
Brent's premium to WTI <CL-LCO1=R> narrowed about $7 in nearly
two weeks as TransCanada Corp has begun filling a 700,000
barrel-per-day pipeline, which will transport crude from Cushing
to Gulf Coast refiners.
"The inventories within Cushing and the landlocked pricing
region can be drained quicker that has stimulated the
liquidation of that spread which entails selling Brent and
buying WTI," Keenan said.
WTI may strengthen further as U.S. commercial crude oil stocks
are forecast to have fallen for a second week last week by 2.7
million barrels, a Reuters poll of analysts showed.
(Reporting by Florence Tan; editing
by Simon Cameron-Moore)
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