Oil steady after U.S. Capitol drama; tighter supplies in focus

TOKYO, Jan 7 (Reuters) - Oil prices were steady on Thursday
after supporters of President Donald Trump stormed the U.S.
Capitol, with investors focusing on the likelihood of tighter
supplies after Saudi Arabia unilaterally agreed to cut output.
Brent crude LCOc1 was up 8 cents at $54.38 a barrel by
0125 GMT, after gaining 1.3% overnight. U.S. West Texas
Intermediate (WTI) CLc1 gained 11 cents to $50.74, having
slipped earlier in the Asian session. The contract rose 1.4% on
Wednesday.
Saudi Arabia, the world's biggest oil exporter, said it
would voluntarily cut one million barrels per day (bpd) of
output in February and March, after OPEC+, which groups the
Organization of the Petroleum Exporting Countries and other
producers, including Russia, met earlier this week. "WTI crude seems poised to rise higher as the Biden
administration will clamp down on U.S. crude production, the
Saudis tentatively alleviated oversupply concerns with their
1-million bpd cut present, and as the dollar's days seem
numbered," said Edward Moya, senior market analyst at OANDA.
A lower dollar makes oil cheaper because the commodity is
mostly traded using the greenback.
U.S. crude stocks dropped and fuel inventories rose, the
Energy Information Administration said on Wednesday. EIA/S
Crude inventories USOILC=ECI were down by 8 million
barrels in the week to Jan. 1 to 485.5 million barrels, against
a Reuters poll showing analysts expected a 2.1 million-barrel
decline.
The drop in crude stocks is a typical year-end occurrence
as energy companies take oil out of storage to avoid tax bills.
Trump supporters swarmed the U.S. Capitol on Wednesday,
sending it into lockdown, as Vice President Mike Pence refused a
demand from the president to cancel his loss to Democrat Joe
Biden before police declared the situation was secure and the
certification of the election result resumed.