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Oil edged higher near US$59 a barrel on Tuesday, recovering from a two-day slide triggered in part by weaker-than-expected heating fuel demand in the world's biggest oil consumer the United States.
US crude rose 26 cents at US$58.84 a barrel by 1851 GMT, after falling US$1.01 on Monday. London Brent crude, climbed 47 cents to US$59.52.
Unseasonably mild temperatures in the United States were expected to leave heating oil demand about 16 per cent below normal this week, the National Weather Service said.
US heating oil stocks are nearly seven per cent above last year's level.Exporting Countries (Opec) to announce an output cut of 1.2 million barrels per day from Nov. 1.
The producer group believes prices should be between US$55-US$60 a barrel, a senior Kuwait energy official said on Tuesday without specifying whether he was referring to Opec's reference crude basket price or international oil prices.
Since the beginning of October, US and Brent crude have traded between around US$58 to US$62 a barrel, with speculative hedge funds playing a part in keeping prices in this range.
They have sold when the price begins to break higher and bought as it nears the bottom of the six-week range, analysts and traders said.
The latest data from US regulatory body the Commodity Futures Trading Commission showed speculators on the New York Mercantile Exchange cut net crude short positions in the week ended Nov. 7, taking their overall position to around neutral.
"This lack of commitment and a net position which is neutral should partly explain the flat price swings that we currently have," Olivier Jakob, analyst at Petromatrix, said.
- REUTERS
