Crude oil drips from a valve at an oil well operated by Venezuela\’s state oil company PDVSA, in the oil rich Orinoco belt, near Morichal at the state of Monagas April 16, 2015. REUTERS/Carlos Garcia Rawlins/File Photo
* Key OPEC members begin cutting oil production
* China\’s oil demand to hit record, fueled by soaring car sales
* Rising U.S. crude inventories point to oversupply
* Record refinery runs however indicate strong demand
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(Updates detail, prices, comment; paragraphs 2, 5-7)
LONDON, Jan 12 (Reuters) – Oil prices rose on Thursday, supported by reports OPEC was starting to cut output and expectations of strong demand growth in China, but rising U.S. crude inventories reinforced concerns over plentiful global supplies.
Brent crude oil was up 25 cents at $55.35 a barrel by 0930 GMT. U.S. crude was up 5 cents at $52.30.
The Organization of the Petroleum Exporting Countries agreed in November to cut oil production to try to reduce a global supply glut that has depressed prices for more than two years. Several OPEC members appear to be implementing the deal.
“Reports are emerging that OPEC signatories to the production cut agreement have already commenced reducing output,” said Daniel Hynes, commodities analyst at ANZ Research.
Iraq oil minister Jabar Ali al-Luaibi told reporters on Thursday that Iraq was “hoping for a better price.” Iraq had reduced its oil exports by 170,000 bpd and was cutting them by a further 40,000 bpd this week, he said.
Kuwaiti Oil Minister Essam Al-Marzouq told a conference on Thursday that Kuwait had already cut its oil output by more than it promised under the OPEC deal, without giving further details.
Saudi Arabia has earmarked some supply reductions for February to China, India and Malaysia and is focusing most of its cuts on Europe and the United States.
BMI Research said overall “compliance to the OPEC/non-OPEC oil production cut appears to be positive … (and that) we calculate compliance with production cuts at around 73 percent,” led by high compliance from members of the Gulf Cooperation Council, namely Saudi Arabia, United Arab Emirates, Kuwait, Qatar, Bahrain and Oman.
Prices were also lifted by news of record Chinese car sales, which grew by 13.7 percent between 2015 and 2016 to 28 million sold vehicles.
Reflecting China\’s growing fuel consumption, its net crude imports will rise 5.3 percent to 396 million tonnes (around 8 million bpd) in 2017, state-owned China National Petroleum Corp (CNPC) said on Thursday. Its crude demand will hit a record 594 million tonnes this year (around 12 million bpd), CNPC said.
In the United States, traders said an inventory report published by the U.S. Energy Information Administration on Wednesday implied ongoing oversupply as crude stocks unexpectedly rose by 4.1 million barrels to 483.11 million barrels.
(Additional reporting by Henning Gloystein in Singapore; editing by Dale Hudson and Jason Neely)