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Oversupply concerns keep oil price from gaining past US$97 per barrel

KUALA LUMPUR--Oil remained above US$97 a barrel Thursday on lower U.S. stockpiles but concerns of oversupply in the Middle East capped gains.

Benchmark U.S. crude for January delivery was up 4 cents at US$97.24 a barrel at midafternoon Kuala Lumpur time in electronic trading on the New York Mercantile Exchange. The contract gained US$1.16 to close at US$97.20 on Wednesday.

The Organization of Petroleum Exporting Countries agreed Wednesday to maintain its daily production target of 30 million barrels a day.

However, it faces the prospect of overproduction after Iran announced plans to pump up to 4 million barrels a day once sanctions on its crude exports are lifted. Libya also hopes to increase output to 2 million barrels a day once unrest ebbs.

In all, OPEC members would have to reduce their production to keep prices from dropping sharply and hurting oil revenues that underpin their economies. This sparked concerns of a production war inside the cartel.

Brent crude, a benchmark for international oils, was down 13 cents at US$111.75 a barrel on the ICE exchange in London.

In other energy futures trading on Nymex:

— Wholesale gasoline fell 0.9 cent to US$2.71 a gallon.

— Heating oil shed 0.2 cent to US$3.057 a gallon.

— Natural gas fell 0.4 cent to US$3.956 per 1,000 cubic feet.

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