Oil prices buoyed by U.S. crude stock dip

Stacked rigs are seen along with other idled oil drilling equipment at a depot in Dickinson

Stacked rigs are seen along with other idled oil drilling equipment at a depot in Dickinson North Dakota

OPEC members Saudi Arabia and Kuwait signaled that the Organization of the Petroleum Exporting Countries and other producers, including Russian Federation, would likely extend their oil output cut beyond June. The industry body American Petroleum Institute had reported an increase of 2.254 million barrels in gasoline inventories on Tuesday, setting the stage for crude's slide.

US crude's intraday low was also the weakest since April 7.

On the New York Mercantile Exchange, May West Texas Intermediate crude rose 6 cents, or 0.1%, to $50.50 a barrel after tapping a low of $50.21.

"The rebalancing in USA crude stocks may have got under way, but concerns of further gasoline builds are rife even as the US summer driving season shifts up a gear", said Stephen Brennock, an analyst with PVM Oil Associates.

Slight production reported Wednesday also reinforced widespread anxiety that US shale producers are becoming more capable in churning out oil at a lower price, analysts say.

Oil price have stabilized Thursday after a steep drop in the prior session, with promises of further cuts from the world's exporters countering fears of growing production coming from the U.S.

Oil-market news. Oil-exporting countries are moving closer toward ending a global glut and re-balancing the market, and OPEC will decide in May whether to extend production cuts, the group's Secretary-General Mohammad Barkindo said.

The report also stated that oil production in February increased to ten million bpd from 9.75 million bpd in January as more oil was processed by domestic refiners.

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Inventories have been heading back down in the USA and dropped by 1 million barrels in the latest week, the Energy Information Administration said Wednesday, a smaller drop than expected.

This story has not been edited by Firstpost staff and is generated by auto-feed.

U.S. crude inventories probably shrank by 1.7 million barrels last week, according to a Bloomberg survey before an EIA report Wednesday.

U.S. gasoline inventories rose unexpectedly last week as refineries continued to ramp-up, but the resulting drawdown in oil stockpiles was also less than anticipated.

Oil prices regained some ground on Thursday after steep losses the previous day, with a slight drop in United States crude inventories stoking the hope that a global supply overhang might slowly retreat.

While compliance has been strong among OPEC countries, production cuts have lagged among others that have agreed to act to curb oil prices, including Russian Federation.

Oil had rallied above $53 a barrel after some members of the Organization of Petroleum Exporting Countries voiced support for prolonging cuts past June, but rising US output is undermining the effort to trim a global glut. Energy services firm Baker Hughes said on Thursday drillers added 11 oil rigs in the week to April 13, bringing the count up to 683, highest in about two years.

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