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UPDATE 2-Oil prices rise on expected U.S. crude inventory draw

Published 21/12/2016, 06:58 pm
© Reuters.  UPDATE 2-Oil prices rise on expected U.S. crude inventory draw
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* SocGen expects 2017 oil prices in range of $50-60 per barrel

* Despite planned output cuts, oil markets remain well supplied

* China's diesel and gasoline exports surge again (Adds Russia production figures, updates prices)

By Henning Gloystein

SINGAPORE, Dec 21 (Reuters) - Oil prices rose on Wednesday on expectations of a U.S. crude inventory draw, although trading activity was muted as markets start to wind down ahead of the Christmas weekend.

U.S. West Texas Intermediate (WTI) crude oil futures CLc1 were trading at $53.73 per barrel at 0756 GMT, up 43 cents, or 0.81 percent from their last settlement.

International Brent crude oil futures LCOc1 were at $55.59 a barrel, up 44 cents, or 0.79 percent.

Traders said the higher prices were largely due to an expected reduction in U.S. crude oil inventories, which will be reported late on Wednesday.

Jeffrey Halley, analyst at futures OANDA in Singapore said U.S. crude stocks were expected to fall by 2.563 million barrels.

Into next year, French bank Societe Generale (PA:SOGN) said in its December oil market outlook that the agreement between the Organization of the Petroleum Exporting Countries (OPEC) and other leading oil producers such as Russia to cut production by almost 1.8 million barrels per day (bpd) from January 2017 "should push crude prices from the $40-50 range in 2016 to the $50-60 range in 2017." relatively low price expectations for 2017 come as oil markets are expected to remain well supplied despite the planned output cuts. 2016 oil output is expected to total 547.5 million tonnes (11 million bpd), a 2.5 percent increase from the previous year, Energy Minister Alexander Novak told reporters late on Tuesday. advantage of plentiful and relatively cheap crude, refiners especially in Asia are churning out more fuel than the market can absorb.

China exported 1.47 million tonnes of diesel in November, up 61.8 percent from the same month a year earlier, customs data showed on Wednesday, as even fuel thirsty China struggles to cope with the output from its refiners.

Gasoline exports rose 64.6 percent in November to 940,000 tonnes.

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