SINGAPORE: Oil rose on Wednesday, with top exporter Saudi Arabia expected to increase prices for its crude as part of planned supply cuts, although a strong dollar and moderate economic growth prospects restricted gains.
US West Texas Intermediate (WTI) crude futures CLc1 were trading at $52.50 per barrel at 0747 GMT, up 17 cents from the last settlement.
Brent crude futures were up 21 cents at $55.68 a barrel.
The gains were due to an expected tightening of physical oil supplies, as major producers like the Organization of the Petroleum Exporting Countries (Opec) plan to cut crude output from this month in an effort to end a fuel glut that has dogged markets since 2014.
Reflecting a tightening market, top oil exporter Saudi Arabia is expected to raise the official selling price (OSP) for its crude to Asia in February.
In Indonesia, the retroactive December OSP for its Minas crude was set at $52.62 a barrel, up $8.09 from the previous month, a government document showed on Wednesday.
OSPs are a key indicator in determining the prices for crude futures.
“Crude oil has risen... on expectations of reduced supply excess,” said Fawad Razaqzada, market analyst at futures brokerage Forex.com.
Futures prices are also reflecting tighter supply fundamentals.
Both Brent and WTI are in a so-called contango shape since Opec and other producers like Russia announced cuts, in which crude for delivery within the first half of this year is more expensive than spot contracts. — Reuters
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