Oil prices dip on fears Middle East spat could harm OPEC cuts

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Oil prices rose about 1% on Thursday after a larger than expected draw in United States inventories, providing some relief amid investor scepticism that Opec-led cuts will be enough to rebalance an oversupplied market.

In other news, on Thursday, crude oil posted a two-sided trade, first rallying after official USA data showed crude inventories fell sharply last week as refining and exports surged to record highs.

U.S. West Texas Intermediate crude CLc1 futures dropped 87 cents, or 1.81 percent, to $47.46 per barrel.

OPEC and non-OPEC members last week agreed to extend production cuts for a period of nine months until March, but stuck to production cuts of 1.8 million bpd agreed in November past year.

"That would favor the use and demand of fossil fuels, thus giving a much-needed boost to oil prices", Chanes said. Brent crude futures were up 1.1 per cent to us$51.31 a barrel.

They dropped $1.34, or 2.7%, in the previous session to settle at $48.32 per barrel, the lowest close since 12 May.

USA crude futures extended gains after the data and was 1.4 per cent, or 68 cents, higher at us$49 a barrel, as of 11:33 a.m. ET.

Output in May increased from 315,000 barrels per day earlier month to 32.21 million.

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Thereafter Bairstow and Willey steadied things before the latter slapped Parnell to cover on 26, his highest ODI score. Despite losing three wickets at 101, Duminy and captain AB de Villiers took South Africa home easily .

The deal would have required the U.S.to reduce polluting emissions by more than a quarter below 2005 levels by 2025, potentially limiting the growth of high-emissions industries like oil and gas production.

"I think it's still going to be a bit of a debate on the true impact it can have on the oil market", said Olivier Jakob, strategist at Petromatrix.

Rising output from OPEC members, Nigeria and Libya, which were exempted from the output reduction deal, is also undercutting attempts to limit production.

Faced with lingering glut woes, the oil cartel discussed last week reducing output by a further 1 to 1.5 percent, and could revisit the proposal should inventories remain high, according to sources.

There were underlying concerns surrounding increased supplies from Nigeria and Libya given with no immediate move by OPEC to bring these two producers into the production agreement and cap output.

Speaking in Moscow after a meeting between OPEC and Russia, Falih and his Russian counterpart Alexander Novak also said they saw their cooperation in oil markets lasting after the current joint oil output agreement expires in March next year.

Last week, USA crude production was up by almost 500,000 barrels per day (b/d) from year-earlier levels, straining OPEC's efforts to reduce global oversupply.

Russia's Rosneft CEO Igor Sechin also said the market can not stabilize unless all producers cut output.