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Oil prices rise as Kuwait strike drags on
[NEW YORK] Oil prices ended a four-day losing streak Tuesday as sharply curtailed production in Kuwait due to the strike by petroleum workers spurred hopes for an easing of the global crude glut.
The market moved on past disappointment over the collapse Sunday of major producer talks in Doha to address oversupply.
"The market has an amazing resilience to discount bearish information and highlighting the bullish information for the past two months," said Kyle Cooper of IAF Advisors.
US benchmark West Texas Intermediate for delivery in May jumped US$1.30 (3.3 per cent) to US$41.08 a barrel on the New York Mercantile Exchange.
In London, European benchmark Brent North Sea crude for June delivery finished at US$44.03 a barrel, a gain of US$1.12 (2.6 per cent) from Monday's settlement.
The strike in Kuwait, the fourth-largest Opec member, was in its third day Tuesday. The state Kuwait Petroleum Corp. said it had managed to restore some affected production, with output pushing up to 1.5 million barrels per day - half of normal output - from 1.1 million barrels on Sunday.
"The market remains supported by the loss of output due to the Kuwait strike," said Tim Evans of Citi Futures.
While the strike has been running for only three days, he said, "that's been enough of surprise to insert a floor under prices for now." Bob Yawger of Mizuho Securities pointed to speculation that the Kuwait strike could last as long as 10 days.
Mr Yawger also noted the dollar weakened after a disappointing US housing construction report was seen as backing the Federal Reserve's caution in raising interest rates.
The weaker dollar supports all dollar-priced commodities "and particularly crude oil," he said.
The market awaited the US weekly petroleum inventory report on Wednesday. Commercial crude stockpiles were expected to have increased by three million barrels in the week ending April 15, according to analysts surveyed by Bloomberg News, which would tend to push oil prices lower.