* U.S. oil price rises above $37
* UAE follows OPEC deal with cuts to customers
* Expectations of slowing energy demand weigh
(Updates prices, market activity, changes dateline from LONDON
previous)
NEW YORK, Dec 26 (Reuters) - Oil climbed above $37 a barrel on Friday
after the United Arab Emirates joined leading crude exporter Saudi Arabia
in deepening supply curbs in line with OPEC's biggest ever output cut
announced last week.
U.S. crude <CLc1> gained $1.50 to $36.85 a barrel by 1232 p.m. EST
(1732 GMT), after reaching a session high of $37.27.
London Brent <LCOc1> rose $1.08 to $37.69.
"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 Organization of the
Petroleum Exporting Countries to reduce supplies by 2.2 million barrels per
day.
Saudi Arabia informed its customers even before the OPEC meeting they
would be receiving less oil.
The OPEC reduction is its deepest ever as the producer group battles a
market slump that has sliced more than $110 off the price since a July peak
above $147 a barrel.
Oil prices were also supported by thin trading volume was thin on
Friday after oil markets were closed on Thursday to mark Christmas Day.
On Wednesday, U.S. crude had settled more than $3 lower after
government data showing jobless claims in the United States, the world's
biggest oil burner, had risen to a 26-year high and that consumers had cut
spending for the fifth consecutive month in November, deepened the
bearishness.
Asian economies, once seen as a guarantee of high oil demand even if
the United States faltered, have not escaped.
Deepening recession is expected to cut oil demand in Japan, the world's
third biggest oil consumer after the United States and China, by almost 5
percent in the year starting April.
Consumption was also seen sliding by 5.7 percent in the fiscal year
ending next March, the Institute of Energy Economics, Japan, said this
week. []
(additional reporting by Barbara Lewis in London;
Osamu Tsukimori in Tokyo)
