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UPDATE 2-Oil holds gains as producers say market rebalancing

Published 25/09/2017, 04:37 pm
© Reuters.  UPDATE 2-Oil holds gains as producers say market rebalancing
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* Brent stands not far from highest level since March

* Major producers confirm global inventories falling

* Russia seeks cooperation beyond end of next March

* WTI discount to Brent widest since Aug 2015 (Updates prices, adds details)

By Osamu Tsukimori

TOKYO, Sept 25 (Reuters) - Oil prices came under pressure from a strong dollar, but kept most of their gains from the previous session as major producers meeting in Vienna said the market was well on its way towards rebalancing.

The Organization of the Petroleum Exporting Countries, Russia and several other producers have cut production by about 1.8 million barrels per day since the start of 2017, helping lift oil prices by about 15 percent in the past three months.

Kuwaiti Oil Minister Essam al-Marzouq, who chaired Friday's meeting of the Joint Ministerial Monitoring Committee, said output curbs were helping cut global crude inventories to their five-year average, OPEC's stated target. Brent crude for November delivery LCOc1 was down 4 cents at $56.82 a barrel by 0614 GMT, near the highest since March. U.S. crude for November delivery CLc1 was down 10 cents at $50.56, but not far off recent four-month highs.

The dollar index .DXY was up 0.1 percent against a basket of currencies. The euro slipped after Germany's election showed surging support for a far-right party that left Chancellor Angela Merkel scrambling to form a governing coalition. USD/

Russia's energy minister said no decision on extending output curbs beyond the end of March was expected before January, although other ministers suggested such a decision could be taken before the end of this year. UAE's energy minister said on Monday its compliance to supply cuts was 100 percent, while Libya's production stands around 900,000 bpd, down from about 1 million bpd in recent months, a Libyan source said. Elsewhere, Nigeria is pumping below its agreed output cap, its oil minister said. is relatively underpriced compared with other markets, but any steep rise would be offset by rising shale oil production," said Tomomichi Akuta, senior economist at Mitsubishi UFJ Research and Consulting in Tokyo.

Production curbs have faced rising U.S. shale oil output. U.S. energy firms cut the number of oil rigs operating for a third week as a 14-month drilling recovery stalled. were also eyeing developments in North Korea. U.S. Treasury Secretary Steve Mnuchin on Sunday said President Donald Trump wants to avoid nuclear war with North Korea and "will do everything we can" to avoid conflict. WTI crude front month discount to the same month of Brent futures CL-LCO1=R hit $6.28, the widest since August 2015, as U.S. crude was pressured by hurricane damage to U.S. refineries.

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