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But
traders said the market was pressured by investors closing
financial positions that profited from strong gains the day
before.
International Brent crude <LCOc1> and U.S. West Texas
Intermediate (WTI) <CLc1> flirted with negative territory in
early European trading. By 1145 GMT, Brent was up 51 cents at
$56.20 a barrel, while WTI was up 39 cents $53.22.
Traders said there was significant profit-taking after oil shot
to mid-2015 highs earlier this week following a deal reached by
the Middle East-led Organization of the Petroleum Exporting
Countries and other exporters led by Russia to cut output by
almost 1.8 million barrels per day (bpd).
But they added that oil markets were still broadly supported by
the arrangement to crimp output.
"The market is putting a lot of importance on the commentaries
coming out of OPEC and non-OPEC (and) the market is giving OPEC
the benefit of the doubt that cuts will be implemented and
achieved," said Michael McCarthy, chief market strategist at
Sydney's CMC Markets.
However, analysts warned prices would turn fast if the market
believed compliance was lacking.
"The plan was designed on Nov. 30. The foundation was laid down
on Dec. 10. The construction will start on Jan. 1. The following
three to six months will provide us with an answer as to whether
the foundation is strong enough to hold the building or will it
collapse like a house of cards," PVM analysts wrote.
In a sign that producers are acting on their plans to cut
output, Abu Dhabi National Oil Co told customers it would reduce
Murban and Upper Zakum crude supplies by 5 percent and Das crude
exports by 3 percent.
Kuwait Petroleum Corp notified customers of a cut in contractual
crude supplies for January, as did Qatar Petroleum.
Meanwhile, China's November crude output fell 9 percent from a
year earlier to 3.915 million bpd, data showed on Tuesday.
Production recovered from October's 3.78 million bpd, however,
which was the lowest in more than seven years.
China's refinery throughput hit a record in November of 11.14
million bpd, up 3.4 percent year-on-year.
"Declines in Chinese ... crude oil output and expansion of its
strategic crude reserves underpin our view for China's crude oil
imports to strengthen," BMI Research said.
In India, fuel demand rose 12.1 percent year-on-year in
November.
(Additional reporting by Henning Gloystein and Keith Wallis in
Singapore; Editing by Dale Hudson)
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