Oil prices dip on rising virus cases; expected stock draw stems losses

Oil prices dip on rising virus cases; expected stock draw stems losses

LONDON- Oil hit an 11-month high towards $57 a barrel on Tuesday as tighter supply and expectations of a drop in U.S. inventories offset concerns over climbing coronavirus cases globally.Saudi Arabia plans to cut output by an extra 1 million barrels per day (bpd) in February and March to stop inventories from building up. The latest U.S. supply reports are expected to show crude stocks fell for a fifth straight week. Brent crude was up 59 cents, or 1.1%, at $56.25 a barrel by 1440 GMT after touching its highest since last February at $56.75. U.S. West Texas Intermediate (WTI) gained 47 cents, or 0.9%, to $52.72."Saudi Arabia in particular is ensuring through its additional voluntary production cuts that the market is undersupplied if anything," said Eugen Weinberg of Commerzbank.The Saudi cut is part of an OPEC-led deal in which most producers will hold output steady in February. Record cuts by OPEC and its allies in 2020 helped oil recover from historic lows in April. Some analysts see further gains as likely."We advise investors with a high risk tolerance to be long Brent or to sell its downside price risks," said Giovanni Staunovo of UBS in a report on Tuesday.Oil also