Oil above $37 on UAE supply cut

By Rebekah Kebede

NEW YORK (Reuters) - Oil climbed in thin post-holiday trade on Friday after the United Arab Emirates said they will deepen supply cuts in line with OPEC's biggest-ever output cut announced last week and the dollar weakened against the euro.

U.S. crude settled at $37.71 a barrel, up $2.36. London Brent rose $1.76 to settle at $38.37.

The gains broke a nine-day stretch of losing sessions.

"The only positive news (for the market) ... came from the UAE," Olivier Jakob of Petromatrix wrote in a report. "For now at least, Saudi Arabia and the UAE seem to be fully complying with the cuts."

Abu Dhabi National Oil Co (ADNOC), the main producer in the UAE, the world's fifth-largest oil exporter, said it would cut February supplies of Murban and Upper Zakum by 15 percent and Lower Zakum and Umm Shaif by 10 percent each.

A source with an Asian refiner said the ADNOC cuts were more than expected.

"ADNOC had already allocated January volumes, but they reversed the decision, so that messes up our schedule," the source said. "For February, the reduction volumes are very large, so we may need to adjust our ship loadings."

The allocations follow a decision last week by the Organisation of the Petroleum Exporting Countries to reduce supplies by 2.2 million barrels per day.