Forex - Aussie ghains slightly after minutes, BoJ policy ahead - Sean Seshadri

 The Aussie gained slightly on Tuesday after central bank minutes and investors looked ahead to the Bank of Japan for its final words for 2016 on monetary policy in which it is expected to hold pat.

AUD/USD gained 0.03% to 0.7249, while USD/JPY changed hands at 117.15, up 0.03%.

The Reserve Bank of Australia on Tuesday in the minutes of its latest board meeting said it is ready to lower the cash rate again, if needed, by assessing the benefits of lower interest rates with potential risks to household balance sheets.

The U.S. dollar index, which measures the greenback against a basket of currencies, fell 0.07% to 103.00.

Overnight, the dollar retreated from 14-year highs hit last week, while U.S. Treasury yields were lower but the dollar remains underpinned by bets of more U.S. rate hikes.

Gold prices gain in Asia as U.S.-China tensions simmer - Sean Seshadri

Gold gained mildly in Asia on Monday in safe haven buying as tension between China and the U.S. over the South China Sea simmers.

The latest flareup appears resolved with China agreeing to return the US underwater drone that it seized in international waters earlier this week, the Pentagon said Saturday, but President-elect Donald Trump weighed in with a tweet telling Beijing to keep the prove it "stole."

Gold for February delivery on the Comex division of the New York Mercantile Exchange edged up 0.16% to $1,139/25 a troy ounce. Also on the Comex, silver futures for March delivery dipped 0.11% to $16.197 a troy ounce, while copper for March delivery fell 0.12% to $2.546 a pound.

In the week ahead, market players will be eyeing the release of Thursday’s final reading on U.S. third quarter gross domestic product for fresh indications on the strength of the economy and further hints on the future path of monetary policy.

Meanwhile, market participants will be awaiting a monetary policy announcement from the Bank of Japan on Tuesday, with most investors expecting the bank to hold its negative interest rates and 10-year government bond yield target steady.

Last week, gold prices bounced off the previous session's 10-month lows on Friday, but the precious metal still posted its sixth straight weekly decline as expectations for higher U.S. interest rates in the months ahead continued to weigh.

The U.S. central bank predicted it would raise interest rates three times in 2017, up from the two hikes predicted in September. Both a strong dollar and higher interest rates are typically bearish for gold, which is denominated in dollars and struggles to compete with yield-bearing assets when borrowing costs rise.

Gold prices have slumped since Donald Trump was elected president as rising U.S. bond yields and a rally in stocks markets have damped its appeal.

Oil prices edge up as Kuwait cuts supplies by more than expected - Sean Seshadri

Oil prices edged up on Friday after market sources said Kuwait had told customers it was cutting supplies by more than initially expected from January as part of a coordinated effort by oil producers to drain a global glut.

International Brent crude oil futures (LCOc1) were trading at $54.22 per barrel at 0114 GMT, up 20 cents, or 0.37 percent from their last settlement.

U.S. West Texas Intermediate (WTI) crude futures (CLc1) were up 24 cents, or 0.47 percent, at $51.14 per barrel.

The slightly higher prices came after Kuwait, a member of the Organization of the Petroleum Exporting Countries (OPEC), notified customers that it would cut supplies from January as part of an effort by OPEC and other producers led by Russia to cut production by almost 1.8 million barrels per day (bpd) in order to reduce a fuel supply overhang that has dogged markets for over two years.

Kuwait Petroleum Corporation (KPC) already said on Tuesday that it had officially notified its customers of a cut in their contractual crude oil supplies for January, in line with a deal with OPEC to reduce production.

Traders said that market prices rose as KPC appeared to be cutting supplies more than initially expected.

"Prices recovered as news emerged that Kuwait was said to be making bigger production cuts to U.S. and European customers," ANZ bank said on Friday.

Most exporters have a so-called operational tolerance under which they can reduce or increase their contracted exports to clients with little notice.

Market sources said that KPC had informed clients that it was cutting supplies beyond the operational tolerance.

Gold prices gain in Asia as Fed looks set to raise rates - Sean Seshadri

Gold prices edged up in Asia ahead of a widely expected move by the Federal Reserve to hike interest rates on Wednesday, marking the fist such increase in a year.

On the Comex division of the New York Mercantile Exchange gold futures for February delivery rose 0.24% to $1.161.80 a troy ounce. Silver futures edged up 0.12% to $16.998 a troy ounce, while copper futures were quoted flat at $2.597 a pound. Higher interest rates are usually seen as negative for gold, but investors are focused on the tone of the post-meeting press conference on the pace of any hikes in 2017, with some expecting caution from Fed Chair Janet Yellen.

Earlier, the Bank of Japan's Tankan survey showed that an uptick in the sentiment of Japan's major manufacturers, with the headline index at plus-10 in the fourth-quarter, but expected to fall to plus-8 over the next three months.

Overnight, gold prices eased as a leading gold analyst said bearish trend is similar to a scenario that played out last year, when gold fell 18%, and then surged 24%. Some of the volatility can be linked to seasonal demand patterns in the world's top gold buyers, China and India, while inflation concerns are rising on expected heavy fiscal spending under a Trump administration in the U.S.

PRECIOUS-Gold firm on weaker dollar ahead of ECB meeting - Sean Seshadri

Gold edged up slightly on Thursday, with the U.S. dollar weaker as markets waited for clues on the future of the European Central Bank's asset purchase programme later in the day.

FUNDAMENTALS

* Spot gold XAU= had risen 0.2 percent to $1,175.49 an ounce by 0043 GMT. It gained 0.4 percent in the previous session.

* U.S. gold futures GCcv1 were nearly flat at $1,177 an ounce.

* The ECB will extend its already generous asset buys on Thursday, aiming to boost stubbornly weak price growth, but with much of its firepower exhausted it may also debate sending a token signal about the eventual end of such purchases. The euro held firm near a three-week high versus the dollar on Thursday, as investors turned their attention to the ECB meeting, and as the greenback was dragged down by a drop in U.S. bond yields. USD/

* Interest rates on U.S. fixed-rate mortgages rose to their highest levels in more than two years, sending weekly home loan application activity to its weakest since early January, Mortgage Bankers Association data released on Wednesday showed. China's gold reserves totalled 59.24 million fine troy ounces at the end of November, unchanged from a month earlier. Chile has rejected an attempt by local communities to block modifications needed to keep Barrick Gold Corp 's ABX.TO controversial Pascua Lama project alive, a resolution by the ministerial committee involved showed on Wednesday. Holdings of SPDR Gold Trust GLD , the world's largest gold-backed exchange-traded fund, fell 0.72 percent to 863.67 tonnes on Wednesday from Tuesday. GOL/ETF

* Credit Suisse (SIX:CSGN) on Wednesday revised its 2017 gold price to $1,338 per ounce from its prior view of $1,438.

* For the top stories on metals and other news, click TOP/MTL or GOL

DATA AHEAD (GMT)

China trade data for November

1245 European Central Bank policy meeting outcome

1330 U.S.

weekly jobless claims

Brent, NYMEX weaker in Asia despite API crude draw - Sean Seshadri

Crude prices held weaker in Asia on Wednesday despite a draw in U.S. stocks in American Petroleum Institute (API) figures that also showed solid builds in gasoline and distillate inventories.

On the New York Mercantile Exchange, West Texas Intermediate crude for January delivery fell 0.57% to 50.64 a barrel. On London's Intercontinental Exchange, Brent crude for February delivery eased 0.48% at $53.67 a barrel.

The API data will be followed Wednesday by more closely-watched official figures from the U.S. Department of Energy.

Overnight, crude ended a four-day winning streak on views that Organization of Petroleum Exporting Countries would fail to adhere to an agreement to curb output.

"With both Russia and OPEC producing at record amounts, the market is scratching its head about how both blocs will manage to comply with the Vienna production cut targets," said Jeffrey Halley, senior market analyst at OANDA, in a note on Wednesday.

As well, domestic oil production and inventory in the U.S. is also making news with the Jack Gerard of the American Petroleum Institute lobbying president-elect Donald Trump this week to "restore the rule of law" in America's regulatory regime and make the approval of the Dakota Access Pipeline a top priority when he takes office.

“Modernizing our nation’s energy infrastructure benefits American consumers by keeping energy affordable, creating well-paying American jobs, and improving our environment,” said Gerard, based in Washington D.C.

“Moving forward, I am hopeful President-elect Trump will reject the Obama administration’s shameful actions to deny this vital energy project, restore the rule of law in the regulatory process, and make this project’s approval a top priority," Gerard concluded. “I am troubled, though not surprised, that the Obama administration is again putting politics over sound public policy and ignoring the rule of law."

Gold prices dip in Asia after early bargain hunting, Fed views eyed - Sean Seshadri

Gold eased on Tuesday in Asia after an early round of bargain hunting as investors look beyond the widely expected Fed rate hike this month for any new language on the pace of increases going forward.

On the Comex division of the New York Mercantile Exchange gold fell 0.07% to $1,175.65 a troy ounce. Elsewhere in metals trading, silver for March delivery on the Comex rose 0.08% to $16.913 a troy ounce, while copper for March delivery fell 0.45% to $2.682 a pound.

Overnight, gold prices fell more than 1% on Monday as strength in equity markets hit safe haven demand for the precious metal and as expectations for a U.S. rate hike this month continued to weigh.

Gold initially gained after Italian voters rejected a referendum on constitutional changes backed by the government, prompting Prime Minister Matteo Renzi to step down and sending the euro to 20-month lows.

But European stock markets and the single currency rebounded as the referendum outcome had been largely priced in by markets.

Investors were also reassured after the European Central Bank said last week that it was prepared to temporarily step up purchases of Italian government bonds should the referendum results drive up borrowing costs.

Stronger risk appetite curbs the appeal of traditional safe-haven assets, such as gold.

A report from the Institute of Supply Management on Monday showed that gauge of non-manufacturing activity hit a one-year high in November, adding to optimism over the economic outlook.

The precious metal fell almost 8% in November on the back of expectations that increased U.S. fiscal spending under a Trump administration will spur economic growth and inflation, which would ultimately lead to an era of higher interest rates.

Expectations of tighter monetary policy tend to weigh on gold, which struggles to compete with yield-bearing assets when borrowing costs rise. Overnight, New York Fed President William Dudley said on Monday it was too soon for the Fed to judge whether its plan for gradual interest rate hikes needed adjusting under a Trump administration.

NYMEX crude falls in Asia as U.S. industry supply data ahead - Sean Seshadrii

Crude oil prices fell in Asia on Tuesday with U.S. industry inventory estimates ahead expected to set the tone.

The American Petroleum Institute will release its estimates of crude oil and refined product stocks last week later on Tuesday. On Wednesday, more closely-watched official figures from the U.S. Department of Energy are due.

U.S. crude for January delivery dropped 0.98% to $51.28 a barrel on the New York Mercantile Exchange (NYMEX).

Overnight, oil prices reached a new, one-year high by mid-day on Monday, as last week’s rally from the Organization of Petroleum Exporting Countries (OPEC) agreement to cut production continued.

Brent crude, the global oil price benchmark traded on London's Intercontinental Exhcange, was last quoted at $54.22 a barrel.

However, investors are cautious that all 14 members of OPEC will adhere to the production curbs.

NYMEX crude down sharply in Asia as investors take profits - Sean Seshadri

Crude oil prices fell sharply in Asia on Monday as investors took profits on recent gains and looked ahead to a possible output response from U.S. shale producers.

U.S. crude oil dropped 1.12% to $51.10 a barrel on the New York Mercantile Exchange.

Last week, oil prices rose for a third day on Friday, settling above $51 a barrel after the Organization of the Petroleum Exporting Countries reached an agreement to cut output for the first time in eight years in order to reduce a global supply glut.

Global benchmark Brent futures were at $54.43 a barrel, up 49 cents or 0.91% on London’s ICE Futures Exchange and rose nearly 15% for the week, the biggest weekly percentage gain since early 2009.

Oil prices surged after OPEC agreed on its first production cut since 2008, aimed at reining in massive oversupply that has seen prices more than halve since mid-2014.

The deal will see output cut by 1.2 million bpd from January 2017. The agreement will be reassessed after six months with an option to extend for another six months.

The 14-member cartel is responsible for a third of global oil production, or 33.6 million barrels per day.

The agreement also included coordinated action with non-OPEC members, who are expected to decrease production by 600,000 barrels a day.

Russia has said it will cut production by 300,000 barrels a day.

But analysts said that the cuts are likely to cause other producers, especially U.S. shale drillers, to increase output.

Analysts are also doubtful over how the agreement will be enforced, as OPEC has no authority to make its members comply.

Oil prices dip after OPEC-Russia output cut deal, focus swings to implementation - Sean Seshadri

Oil prices slipped on Friday as some investors opted to cash out after Brent touched 16-month a high on Thursday, with optimism over this week's OPEC-Russia accord on cutting output giving way to questions on the "sticking point" of implementing the deal.

International Brent crude oil futures (LCOc1) were trading at $53.66 per barrel at 0242 GMT, down 28 cents, or 0.52 percent, from their last close.

U.S. West Texas Intermediate (WTI) futures (CLc1) were at $50.92, down 14 cents, or 0.27 percent.

Brent and WTI futures had jumped more than 10 percent since Wednesday's agreement by OPEC members and Russia to reduce crude production by a combined 1.5 million barrels per day.

Analysts are now focusing their attention on implementation of the deal, the first agreement since 2001 by the Organization of the Petroleum Exporting Countries (OPEC) and Russia to coordinate production cuts.

"It looks achievable on the face of it, provided the parties to the latest production cut deal stick to their pledges, which has historically been somewhat of a sticking point," ANZ bank said on Friday.

Still, traders said the market remained broadly optimistic in the longer term about an accord designed to help bring the oil market back into balance.

"This is positive news that will make a sustainable difference to the oil market over the coming months," said Ric Spooner, chief market strategist at CMC Markets, adding that it wouldn't be surprising to see momentum pick up.

Traders said price developments in crude futures over the coming days should provide evidence of the extent of the market's optimism for the deal.

"WTI has arrived at the peaks from the middle of last year and again in October," Spooner said, adding the next movements in the futures should provide insight into exactly how positively traders view this week's agreement.

NYMEX, Brent hold gains in Asia on OPEC cut, China PMIs help - Sean Seshadri

Crude oil prices held overnight gains into Asia on Thursday as manufacturing figures out of China lifted regional sentiment on demand by the world's second largest importer.

On the New York Mercantile Exchange, U.S. crude for January delivery edged up 0.06% to $49.47 a barrel in Asia. Brent crude futures traded on London's Intercontinental Exchange were quoted flat at $51.84 a barrel.

China reported Thursday that the semi-official CFLP manufacturing index came in at 51.7 for November, compared with a 51.0 level seen, and up from 51.2 the previous month. The CFLP non-manufacturing PMI came in at 54.7, compared to 54.0 last month, subsequent figures from the private Caixin manufacturing PMI rose to 50.9 in November, beating an expected 50.8 level.

The Caixin index has now been above the 50-point neutral level which separates expansion in activity from contraction for five straight months, adding to views that in the world's second-largest economy growth has stabilized thanks to a credit and construction boom.

Overnight, oil prices surged nearly 9%, climbing after the Organization of the Petroleum Exporting Countries (OPEC) agreed to slash production.

OPEC ministers said the production pact had been several months in the making. "Over the past two months, this committee has done some excellent work. The meetings it has undertaken have been extremely constructive, providing us all with a better appreciation and understanding of the various viewpoints among OPEC and non-OPEC producers," said Mohammed Bin Saleh Al-Sada, Qatar's Minister of Energy and Industry and President of the OPEC Conference.

"The last time we met as a conference was in Algiers on September 28. This historic occasion, with OPEC Member Countries unified in approving the already mentioned ‘Algiers Accord’, saw an agreement on a new OPEC production target range. The focus was on accelerating the drawdown of the stock overhang and bringing the market rebalancing forward.

The energy minister said that the production cutting agreement will stabilize global oil prices. Oil prices have fluctuated at a rate during the last two months that makes OPEC leaders uncomfortable. "It is vital that stock levels start to fall, as the decision taken in Algiers recognized. As we have seen in previous cycles, once this overhang starts falling on a regular basis then prices start to rise and more stability will return to the market," Bin Saleh commented.

Oil production "remains a growth business," he added, "with oil demand in OPEC’s 2016 World Oil Outlook reaching over 109 million barrels of oil a day by 2040, a healthy increase of over 16 million barrels a day."

This growth will require "significant investments in the upstream, midstream and downstream," he concluded.
"Overall, estimated oil-related investment requirements are close to $10 trillion in the period to 2040."

Investors in the U.S. speculated that the oil production slowdown overseas could be good for business in the U.S. Under incoming President Donald Trump, oil exploration is expected to be allowed off the coast of Virginia and off the coast of Florida. Artic and Antarctic exploration, banned by current President Obama, could also be allowed by the Trump White House, and expanded U.S. production is something advocated by former Gov. Rick Perry (R-Texas), who is being touted for Energy Secretary. Oil field equipment stocks from Halliburton Company (NYSE:NYSE:HAL) and others could also benefit from the trend, analysts said.

NYMEX crude rebounds in Asia after API draw, OPEC key - Sean Seshadri

Crude oil prices rebounded mildly in Asia on Wednesday after a draw reported in industry inventory data from the U.S. and as speculation swirls on OPEC's production plans ahead of a crucial meeting in Vienna.

U.S. crude oil on the New York Mercantile Exchange traded at $45.39 a barrel, up 0.35%.

Prices were weighed Tuesday by conflicting media comments that call into question OPEC's ability to come to agreement about a cut in production. OPEC members will meet Wednesday in Vienna, Austria.

The American Petroleum Institute late Tuesday said crude oil inventories fell 720,000 barrels last week, 120,000 barrels more than expected and which followed a draw of 1.28 million barrels the previous week.

Overnight, oil prices fell more than 3% on Tuesday, extending early losses amid growing doubts that the Organization of the Petroleum Exporting Countries will be able to reach an agreement on a deal to curb output.

Global benchmark Brent futures on London's Intercontinental Exchange were last quoted at $47.24 a barrel.

OPEC is attempting to get its 14 member states, along with non-OPEC member Russia, to implement coordinated production cuts aimed at reducing a global supply glut that has seen prices more than halve since 2014.

Oil came under renewed selling pressure after Indonesia’s energy minister said Tuesday he’s “not optimistic” that OPEC will agree on a deal to rein in oversupply.

In September the producer cartel reached an agreement that would reduce production to between 32.5 million and 33 million barrels per day.

The organization is to hold a key meeting in Vienna on Wednesday, where the deal was expected to be rubber stamped.

But reaching a deal has proved problematic, amid disagreements over which producers should cut and by how much.

Technical talks between OPEC members on Monday failed to reach an agreement on output cuts, with Iraq and Iran - OPEC’s second and third-largest producers – resisting pressure from Saudi Arabia to reduce production.

Most analysts still believe OPEC will sign an accord to cut output, but doubts remain over whether it will be enough to support the market.

Morgan Stanley (NYSE:MS) said Tuesday it still sees a deal as likely but added that the risks of failure have risen.

“A strong announcement from OPEC to cut meaningfully could lift oil to $50 or more over the following days, particularly if supported by strong words from non-OPEC, before focus shifts to execution risk, sustainability and any non-OPEC supply response” analysts at Morgan Stanley wrote.

Gold prices inch up in Asia as dollar movements eyed for direction - Sean Seshadri

Gold prices inched up in Asia on Tuesday with the dollar in focus as it mildly retraces sharp gains in the past month on the suprise win of U.S. president-elect Donald Trump and widespread expectations for a Fed rate hike in December.

Gold for December delivery rose 0.10% to $1,192.00 a troy ounce on the Comex division of the New York Mercantile Exchange. As well, silver futures gained 0.29% to $16.723 atroy ounce, while copper futures jumped 0.49% to $2.672 a pound.

Overnight, gold prices rose more than 1% on Monday, rebounding from nine-and-a-half month lows as the dollar reversed some of its post U.S. election gains after surging to almost 14-year highs last week.

The dollar slipped lower on Friday as traders took advantage of the holiday-shortened week to take profits after a powerful rally propelled it to the highest level since April 2003.

Dollar selling resumed on Monday as investors looked ahead to potentially risky events such as Wednesday’s OPEC meeting and Italy’s upcoming constitutional referendum on December 4, which could see the government resign.Investors were also looking ahead to a raft of U.S. economic data this week, including Friday’s nonfarm payrolls report for November.

Gold is priced in dollars and becomes more attractive to holders of other currencies when the dollar falls.

Prices of the yellow metal have fallen around 6% so far this month on expectations that increased U.S. fiscal spending under a Trump administration will spur economic growth and inflation, which would ultimately lead to an era of higher interest rates.

Gold is sensitive to moves in U.S. rates, which lift the opportunity cost of holding non-yielding assets such as bullion, while boosting the dollar in which it is priced.

Gold rebounds from multi-month lows, up more than 1% - Sean Seshadri

Gold prices rose more than 1% on Monday, rebounding from nine-and-a-half month lows as the dollar reversed some of its post U.S. election gains after surging to almost 14-year highs last week.

Gold for December delivery was trading at $1,192.5 a troy ounce by 0934 GMT, after earlier rising as high as $1,197.00.

The precious metal touched a low of $1,171.21 per ounce on Friday, a level not seen since February 8.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.4% at 101.07, adding to Friday’s losses.

The dollar slipped lower on Friday as traders took advantage of the holiday-shortened week to take profits after a powerful rally propelled it to the highest level since April 2003.

Dollar selling resumed on Monday as investors looked ahead to potentially risky events such as Wednesday’s OPEC meeting and Italy’s upcoming constitutional referendum on December 4, which could see the government resign.

Investors were also looking ahead to a raft of U.S. economic data this week, including Friday’s nonfarm payrolls report for November.

Gold is priced in dollars and becomes more attractive to holders of other currencies when the dollar falls.

Prices of the yellow metal have fallen around 6% so far this month on expectations that increased U.S. fiscal spending under a Trump administration will spur economic growth and inflation, which would ultimately lead to an era of higher interest rates.

Gold is sensitive to moves in U.S. rates, which lift the opportunity cost of holding non-yielding assets such as bullion, while boosting the dollar in which it is priced.

Elsewhere in metals trading, silver futures were at $16.78 a troy ounce, while copper futures traded at $2.70 a pound.

Copper prices have climbed almost 23% this month on hopes that infrastructure plans in top consumers China and the U.S. will bolster demand for the industrial metal.

Germany, 15 other countries press for arms control deal with Russia - Sean Seshadri

Fifteen European countries have joined Germany in its push for a new arms control agreement with Moscow, saying more dialogue is needed to prevent an arms race in Europe after Russia's actions in Crimea and eastern Ukraine, a German newspaper said.

"Europe's security is in danger," German Foreign Minister Frank-Walter Steinmeier told Die Welt newspaper in an interview published on Friday. "As difficult as ties to Russia may currently be, we need more dialogue, not less."

Steinmeier, a Social Democrat who has been nominated to become German president next year, first called for a new arms control deal with Russia in August to avoid an escalation of tensions in Europe.

Fifteen other countries - all belonging to the Organization for Security and Cooperation in Europe - have since joined Steinmeier's initiative: France, Italy, Austria, Belgium, Switzerland, the Czech Republic, Spain, Finland, the Netherlands, Norway, Romania, Sweden, Slovakia, Bulgaria and Portugal.

The group plans to issue a joint statement on Friday and will meet again on the sidelines of a Dec. 8-9 ministerial level OSCE meeting in Hamburg that will be hosted by Germany, which now holds the rotating presidency of the OSCE.

Steinmeier condemned Russia's annexation of Crimea and its support for separatists in eastern Ukraine, saying such acts undermined delicate bonds of trust built up over decades and threatened to unleashed a new arms race.

He urged more countries to join the arms control initiative.

"We have a responsibility to leave no stone unturned in our effort to increase security and peace," he told the paper.

U.S. officials are skeptical about the initiative, citing Russia's failure to abide by existing agreements and treaties.

Steinmeier also drew criticism from U.S. and NATO officials in June after warning that Western military maneuvers in eastern Europe amounted to "saber-rattling and shrill war cries" that could worsen tensions with Russia.

His Social Democrats (SPD) generally back a more conciliatory stance toward Russia than Chancellor Angela Merkel's conservative bloc.

Both parties are concerned about U.S. President-elect Donald Trump's comments during the campaign about rebuilding ties to Russian President Vladimir Putin and suggesting that he may scale back protection of NATO allies.

Oil prices static on uncertainty over planned production cut - Sean Seshadri

Oil prices were little changed on Thursday as uncertainty ahead of a planned OPEC-led crude production cut and thin liquidity due to the U.S. Thanksgiving holiday kept traders from making big new bets on markets.

International Brent crude oil futures (LCOc1) were trading at $48.90 at 0209 GMT, down 5 cents from their last close.

U.S. West Texas Intermediate (WTI) crude futures (CLc1) were at $47.94 per barrel, down 2 cents from their last settlement.

Traders said market activity was low due to the U.S. holiday, and there was a reluctance to take on big price directional bets due to uncertainty about a planned oil production cut, led by the Organization of the Petroleum Exporting Countries (OPEC).

OPEC is due to meet on Nov. 30 to coordinate a cut, potentially together with non-OPEC member Russia, but there is also disagreement within the producer cartel as to which member states should cut and by how much.

"The Thanksgiving Holiday today has thinned traders interest ... but the OPEC result next Wednesday is the only game in town for energy traders," said Jeffrey Halley, senior market analyst at OANDA brokerages in Singapore.

Most analysts believe that some form of a production cut will be agreed, though it is uncertain whether this will be enough to prop up a market that has been dogged by a fuel supply overhang for over two years.

Beyond OPEC, traders said the strong U.S.-dollar, which is at levels last seen in 2003 against a basket of other leading currencies (DXY), was influencing oil prices.

A strong dollar, in which oil is traded, makes fuel purchases more expensive for countries using other currencies at home, potentially crimping demand.

Oil at three-week high ahead of OPEC decision on output - Sean Seshadri

Oil prices rose over 3 percent to a three-week high on Monday, catching a lift from a weaker dollar, as major oil producing countries appeared to be moving closer to agreeing to limit output.

Brent crude oil has risen 11 percent in a week since Saudi Arabia, the de facto leader of the Organization of the Petroleum Exporting Countries, started a diplomatic charm offensive to persuade the group's more reluctant members to join its proposed output plan. OPEC members are due to agree a world oil freeze pact with non-OPEC countries on Nov. 30.

In the last several days, several members of the group, including Iran, along with non-member Russia, have suggested they are likely to agree to a deal to limit output.

"When you’ve got all of the major players on board with a production cut, obviously you're very close to getting a deal done," said Phil Flynn, senior market analyst at Price Futures Group in Chicago.

"You never know with OPEC - sometimes they go to the last minute and there are a lot of false starts."

Brent crude futures (LCOc1) rose $1.67 to $48.53 a barrel by 10:46 a.m. ET (1546 GMT), having touched $48.62, the loftiest level since Nov. 1. U.S. West Texas Intermediate (WTI) (CLc1) strengthened by $1.56 to $47.25 a barrel, after climbing as high as $47.33.

The dollar (DXY) also edged lower, easing off last week's 13-1/2-year highs as Treasury yields nudged lower, bolstering oil and the broader commodities complex including copperand gold <XAU=>.

Goldman Sachs analysts said in a note that the odds of an OPEC cut succeeding have increased, and believe the global oil surplus will shift into a deficit by the middle of next year, which would support prices.

Russian President Vladimir Putin said he saw no obstacle to freezing oil output, which at more than 11 million barrels per day is at a post-Soviet high.

OPEC members last week proposed a deal for Iran to cap, rather than cut, output.

Iran has been one of the main hurdles facing any curtailment, as Tehran wants exemptions to try to recapture market share lost under years of Western sanctions.

Libya and Nigeria, whose exports have been hampered by violence, have also asked to be left out of any deal. Nigeria's oil production fell to 1.63 million bpd in the third quarter from 1.69 million in the second quarter.

Hedge funds took a more cautious stance on oil prices amid the flurry of OPEC diplomatic, cutting their combined net long position in the three major Brent and WTI futures and options contracts by just 3 million barrels to 422 million barrels in the week ending Nov. 15.