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UPDATE 3-Brent hits 5-mth high on Abu Dhabi supply cuts, China data

Mon, 31st Aug 2020 06:10

* ADNOC cuts Asia crude supplies in Oct by 30% - sources

* Brent set for 5th monthly gain; 4th mth for WTI

* China's crude imports set for first fall in 5 months
(Changes dateline, updates prices)

By Noah Browning

LONDON, Aug 31 (Reuters) - Oil rose on Monday, with Brent
touching the highest in five months, underpinned by a 30% cut in
Abu Dhabi crude supplies and encouraging Chinese data even as
global demand struggles to return to pre-COVID levels in a well
supplied market.

Brent crude futures for November advanced to $46.50
a barrel by 0853 GMT up 69 cents, or 1.5%. U.S. West Texas
Intermediate crude was at $43.48 a barrel, up 51 cents,
or 1.2%.

Brent is set to close out August with a fifth successive
monthly price rise while WTI is on track for a fourth monthly
gain, having hit a five-month high of $43.78 a barrel on Aug. 26
when Hurricane Laura struck.

Abu Dhabi National Oil Company told its customers on Monday
that it will reduce October supplies by 30%, up from a 5% cut in
September, as directed by the United Arab Emirates government to
meet its commitment on the recent OPEC+ agreement.

"With demand gradually recovering, this will allow the
market to better absorb the inventory glut from earlier this
year," OCBC's economist Howie Lee said.

Energy companies continued efforts to restore operations at
U.S. Gulf Coast offshore platforms and refineries shut before
the storm.

A weak U.S. dollar and a survey on Monday showing
surprisingly strength in China's services sector supported oil
prices even though fuel demand has struggled to recover amid the
coronavirus pandemic and supplies remain ample, analysts say,
cautioning of hurdles for crude going forward.

"Oil is likely to slowly grind higher in modest steps, not
explode out of the wellhead higher," OANDA's Asia-Pacific
analyst Jeffrey Halley said, adding that abundant near-term
supplies and the fragility of the global recovery tempered price

China's crude imports in September are set to fall for the
first time in five months as record volumes of crude are stored
in and outside of the world's largest importer, data from
Refinitiv and Vortexa showed.
(Reporting by Noah Browning and Florence Tan, editing by Louise

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