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The Scotsman: Oil eases, above $63 after US weather delays, OPEC

By Neil Chatterjee

SINGAPORE (Reuters) – Oil edged lower towards $63 on Monday, pulling back from last week’s gains as a dense fog delaying U.S. crude shipments is expected to ease this week, though support came from OPEC’s plan to further cut output.

U.S. crude fell 29 cents to $63.14 a barrel by 0309 GMT, after rising 92 cents on Friday to the highest settlement in two weeks. London Brent slipped 18 cents to $63.31 a barrel.

Forecasts show a fog delaying tankers carrying crude to refineries along the U.S. Gulf Coast could lift early this week, though vessel traffic on the Houston Ship Channel was halted again on Sunday night due to the fog.

Four days of intermittent delays on the waterway, which feeds the nation’s busiest petrochemicals port, has led some refiners in the area to warn they may need to slow fuel production, but so far no Gulf Coast refinery has announced production cuts.

The shipping disruptions follow OPEC’s decision on Thursday for a second output cut of 500,000 barrels per day (bpd) to start from February, coming on top of a 1.2 million bpd reduction agreed from November.

“People thought they might not cut so the market has been supported by the OPEC move and by U.S. inventory statistics,” said Hiroyuki Kitakata at Barclays Capital in Tokyo. “On the other hand temperatures in the U.S. northeast are above normal, so it depends on the weather.”

Analysts said OPEC’s deal seemed to be a compromise between price hawks who feared swollen inventories would cause prices to slump in the second quarter, and others who worried that an immediate cut could leave markets short at the height of winter.

A Reuters survey shows OPEC only met about two-thirds of its initial cutbacks, so some analysts question whether fresh limits will be effective in supporting prices that have slid about 20 percent from a record over $78 in July.

U.S. crude oil stocks fell a sharper than expected 4.3 million barrels last week, but still stand at their highest since 1998 for this time of year.

Supplies of crude from Nigeria, already down by about a fifth because of militant attacks, have been further trimmed by gunmen who seized an oil platform operated by Royal Dutch Shell in the Niger Delta, shutting its 12,000 bpd oil output, the company said on Saturday.

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