* Brent and WTI rise in subdued trading
* Russia says cooperation with OPEC to continue
* Saudi Arabia and Kuwait to restore Neutral Zone output
* Graphic on U.S. petroleum stocks: https://tmsnrt.rs/35DZduT
(Updates with settlement prices)
By Jessica Resnick-Ault
NEW YORK, Dec 24 (Reuters) - Oil prices rose on Tuesday in
thin pre-Christmas trading after Russia said cooperation with
OPEC on supply cuts would continue and amid optimism that the
United States and China could finalize a trade agreement.
Brent crude LCOc1 settled up 81 cents, or 1.22%, at $67.20
a barrel after a shortened session ahead of the Christmas
holiday. U.S. West Texas Intermediate CLc1 settled up 59
cents, or 0.97%, at $61.11 a barrel.
OPEC and Russia will continue their cooperation as long as
it is "effective and brings results," Russian energy minister
Alexander Novak said in an interview on Monday. OPEC and allies agreed in November to extend and deepen
output curbs in place since 2017. Under the reduced output, as
much as 2.1 million barrels per day (bpd) could be taken off the
market, or about 2% of global demand. Still, OPEC needs to do more to balance the market on a
sustainable basis, Bjornar Tonhaugen, head of oil market
research at Rystad Energy, said in a note.
"The OPEC cuts didn't fully solve the problem – instead they
offer a light bandage to get through the first quarter of 2020,"
said Tonhaugen.
The market also rose as U.S. President Donald Trump said on
Tuesday he and Chinese President Xi Jinping will have a signing
ceremony to sign the first phase of the U.S.-China trade deal
agreed to this month. Trade tensions between the
two countries have weighed on the oil market because of worries
of a slowdown in demand growth.
Still, the market faces headwinds from growing supply.
A deal signed on Tuesday between Kuwait and Saudi Arabia on
the Neutral Zone between the two countries could add to supply
next year. The agreement aims to end a five-year dispute between
the OPEC members and reopen fields which can produce 0.5 million
bpd, or 0.5% of global supply.
U.S. oil major Chevron Corp CVX.N , which helps operate the
fields, said full production was expected within 12 months.
While the Organization of the Petroleum Exporting Countries
has been cutting production, U.S. producers have been filling
the gap, pumping ever greater amounts of crude to reach a record
high of about 13 million bpd in November.
That has helped swell inventories with U.S. stocks up about
1% this year.
Crude stocks, however, are expected to have fallen by about
1.8 million barrels last week, a second week of declines,
according to a preliminary Reuters poll. EIA/S
The weekly government report on inventories has been delayed
by two days due to Christmas. The report is normally released on
Wednesday at 10:30 a.m. EST (1530 GMT).
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GRAPHIC: U.S. petroleum inventories https://tmsnrt.rs/35Hre4S
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