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Oil prices holding gains as demand outlook brightens

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Oil prices holding gains as demand outlook brightens

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TOKYO (Reuters) – Oil prices were lower on Friday but largely held gains that had prices flirting with multi-month highs, as the cleanup after hurricanes in the United States gathered pace and the outlook for demand took on a firmer tone. In other markets, typically safe haven assets like the yen <=JPY> and gold <XAU=> were higher, after North Korea fired off yet another missile in breach of United Nations sanctions, amid high regional tensions over its nuclear weapons programme. U.S. West Texas Intermediate crude <CLc1> was down 15 cents, or 0.3 percent, at $49.74 a barrel at 0012 GMT. It briefly broke above $50 to a four-month high on Thursday and finished 1.2 percent higher at $49.89, its highest close since July 31. Brent crude <LCOc1> futures were down 20 cents, or 0.4 percent, at $55.27 a barrel. They gained 0.6 percent to settle at $55.47 the previous session, the highest close since April 13. “The psychological barrier of $50 per barrel remains a big hurdle for WTI, after it failed to settle above it once again,” ANZ bank said in a research note. Nevertheless, U.S. crude is on track for a nearly 5 percent gain this week, buoyed by the return of refineries after Hurricane Harvey and stronger indications of demand. Brent is heading for a 3 percent gain and a third consecutive weekly rise. On Wednesday, the IEA said a global oil glut was shrinking thanks to strong European and U.S. demand, as well as production declines in OPEC and non-OPEC countries. The Organization of the Petroleum Exporting Countries (OPEC) earlier forecast higher demand for its oil in 2018 and pointed to signs of a tighter global market, indicating its production-cutting deal with non-member countries is helping to tackle a supply glut. BP Chief Executive Bob Dudley told Reuters in an interview that oil prices were likely to stay between $50 and $60 as major producers kept output restricted.

(Reporting by Aaron Sheldrick; Editing by Muralikumar Anantharaman)
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