Oil dips in volatile trade; Saudi output cuts limit losses

* Oil volatile as markets roiled by Apple warning, U.S. data

* Saudi Arabia may cut Feb heavy crude prices to Asia

* OPEC oil output posts biggest drop since 2017 on Saudimove

* Coming up: API data on U.S. crude inventories (New throughout, updates prices, market activity and comments;new byline, changes dateline, previous LONDON)

By Stephanie Kelly

NEW YORK, Jan 3 (Reuters) - Oil prices edged lower in choppytrade on Thursday, pressured by concerns about slowing globaleconomic growth that could dent demand for crude but drawingsupport from signs of output cuts by Saudi Arabia.

Brent crude LCOc1 futures fell 27 cents to $54.64 a barrelby 10:46 a.m. EST (1546 GMT). U.S. West Texas Intermediate (WTI)crude CLc1 futures fell 60 cents to $45.94 a barrel, a 1.3percent loss.

Prices traded in a wide range, with Brent hitting a sessionhigh of $56.30 a barrel and a low of $53.93 a barrel. WTI posteda session high of $47.49 a barrel and a low of $45.35 a barrel.

Crude futures mirrored volatility in other markets aftertech giant AppleAAPL.O cut its sales forecast, citing aslowdown in China. urn:newsml:reuters.com:*:nL3N1Z236Y.N The news rattled U.S.equity markets and weighed on oil prices, which have recentlymoved in tandem with Wall Street.

Weaker-than-expected U.S. factory data added to worriesabout a slowing global economy.

"Oil is flip-flopping on concerns of supply and demand,"said Phil Flynn, an analyst at Price Futures Group in Chicago."It's really a battle between the supply situation, which looksto be tightening, versus the possibility that demand will dropoff."

Supporting futures were signs of reduced supply from OPECmembers. OPEC oil supply fell in December by the largest amountin almost two years, a Reuters survey found, as top exporterSaudi Arabia made an early start to a supply-limiting accordwhile Iran and Libya posted involuntary declines. urn:newsml:reuters.com:*:nL8N1Z33J5

"The feeling is that OPEC is delivering on cuts," SEB headof commodities Bjarne Schieldrop said.

The Organization of the Petroleum Exporting Countries led bySaudi Arabia, alongside allied producers led by Russia, agreedlast year to rein in supplies starting from January after oilprices tumbled from above $86 on worries about surging output.

Investors have been concerned about rising supply from topproducers, including the United States and Russia.

Riyadh was expected to cut February prices for heavier crudegrades sold to Asia due to weaker fuel oil margins whilereducing prices for light grades to keep Saudi oil competitiveagainst rising U.S. shale oil supplies, a Reuters survey showedon Thursday. urn:newsml:reuters.com:*:nL3N1Z31B2urn:newsml:reuters.com:*:nL3N1Z31B2

Supply from Iraq, the second biggest producer in OPEC, hasalso climbed, with December exports at 3.73 million bpd versus3.37 million bpd in November. urn:newsml:reuters.com:*:nL8N1Z20LJ

(Additional reporting by Noah Browning in LondonEditing by Dale Hudson, Edmund Blair and David Gregorio) ((Stephanie.Kelly@thomsonreuters.com; 646-223-4471; ReutersMessaging: stephanie.kelly.thomsonreuters.com@reuters.net))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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