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Oil prices rise before weekly US inventories

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(Globalpost/GlobalPost)

World oil prices climbed on Wednesday before the weekly stockpiles report in top consumer the United States, winning support from rising equities and renewed speculation over a possible OPEC output cut, analysts said.

Brent North Sea crude for delivery in June rose 72 cents to $101.03 a barrel in London midday deals.

New York's main contract, light sweet crude for June, added 64 cents to $89.82 a barrel.

The market had slumped last week, with Brent striking a nine-month low on weak Chinese data, while sentiment was also hit on Tuesday by weak manufacturing data in the Asian powerhouse nation.

Prices have recovered on talk of an output cut from the Organization of the Petroleum Exporting Countries (OPEC).

"Brent crude oil climbed higher and held above $100 per barrel, supported by strong gains in equity and commodity markets and renewed concerns that OPEC might cut crude oil supplies if prices continue the recent sharp sell-off," said Sucden analyst Myrto Sokou on Wednesday.

OPEC, which pumps about 35 percent of global oil supplies, is set to meet in Vienna on May 31 for a regular output meeting.

Later on Wednesday, the US government's Department of Energy will publish its update on American oil reserves for the week ending April 19.

"There is an underlying growth-in-demand prospect with the upcoming US stockpiles data. This is fuelling positive sentiment and balancing generally softer economic data," Jason Hughes, head of sales trading at CMC Markets in Singapore, told AFP.

Market expectations are for US crude oil inventories to fall by 1.2 million barrels, according to analysts polled by Dow Jones Newswires.

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http://www.globalpost.com/dispatch/news/afp/130424/oil-prices-rise-weekly-us-inventories