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SINGAPORE Oil prices rose on Thursday, lifted by concerns over Venezuela’s stability as well as by firm demand in Asia, although doubts over OPEC’s ability to organize a coordinated production cut still weighed on markets.
International Brent crude oil futures LCOc1 were trading at $50.18 per barrel at 0655 GMT (2:55 a.m. ET) on Thursday, up 20 cents, or 0.4 percent, from their last close.
WTI futures CLc1 were at $49.33 per barrel, up 15 cents, or 0.31 percent, from their previous settlement.
Traders said concerns over political stability in Venezuela, a major oil producer, had lifted markets.
In Asia, South Korea’s S-Oil Corp (010950.KS) said on Thursday that it expected refinery demand to rise in the region.
As crude is the main feedstock for oil refineries, strong refining activity tends to be price supportive of crude.
In the United States, WTI futures received support from a 553,000-barrel draw in crude inventories to 468.16 million barrels. [EIA/S]
But some analysts said that the drop in stocks was misleading.
“The decline of 553,000 barrels last week was centered on the west coast, which is isolated from the rest of the network. Inventories actually increased along the East and Gulf Coasts,” ANZ bank said on Thursday.
Traders also said that oil prices were being held back on doubts that the Organization of the Petroleum Exporting Countries (OPEC) and non-OPEC producers like Russia will be able to effectively coordinate curbs in output to prop up prices.
“Investors remain uncertain as to whether OPEC can implement the tentative agreement to cut production,” ANZ bank said.
A cut is being pushed by Saudi Arabia, OPEC’s biggest producer, and it is being supported – at least by word – by Russia, not a member of the cartel but the world’s biggest oil producer.
However, OPEC’s No.2 producer, Iraq, has said it would not cut output, arguing it needs the revenue to fight Islamic State, and the government is trying to lure investors to boost output further from its current record 4.43 million barrels per day.
(Reporting by Henning Gloystein; Editing by Richard Pullin and Gopakumar Warrier)