Oil steadies as OPEC boost offsets dent from USA supply

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A global crude glut has persisted even as the Organization of the Petroleum Exporting Countries and other producing countries including Russian Federation have worked to reduce output under an agreement to cut supplies nearly 1.8 million barrels per day in the first half of 2017.

A Reuters poll showed analysts expected data to show USA crude stocks fell in the week to April 14.

"The glaring rise in USA gasoline refined product inventories, in combination with persistent lower-48 production growth, keeps us cautious on oil prices", said Chris Kettenmann, chief energy strategist at Macro Risk Advisors LLC in NY.

Oil prices ended mixed on Thursday after a seesaw trading session, as investors weighed rising US production against geopolitical uncertainties and comments from leading Gulf oil producers that an extension to OPEC-led supply cuts was likely.

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Gasoline stocks posted a counter-seasonal build of 1.5 million barrels, despite heavier refining activity.

USA crude imports rose last week by 56,000 barrels per day.

Global benchmark Brent crude futures fell 11 cents, trading at $55.25 a barrel, while Brent touched $54.76 intraday, its lowest since April 7. That surprise build in gasoline, along with an increase in USA production, pressured prices.

Increasing U.S. output is undermining attempts by the Organization of the Petroleum Exporting Countries and other major oil producers to curb output and sustain a price rally in a market that has been oversupplied since mid-2014.

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The analysts even suggest that the OPEC deal could offset any gains in US shale output over the next 6 to 9 months.

Oil dropped the most in six weeks after a report showed USA gasoline supplies increased for the first time since February, while crude output keeps rising. Looking at the latest price reactions, one might conclude that the only reason for the previous price rise was the expectation of further production cuts on the part of OPEC", Commerzbank (Xetra: "CBK100 - news) strategist Carsten Fritch said.

USA crude's intraday low was also the weakest since April 7. As stated by Khalid al-Falih, OPEC members will assess the market scopes for the next two years and act cautiously when deciding on a possible extension of the agreement.

Saudi Arabia has undertaken the largest cut in oil output (486,000 barrels per day) among the participants of the OPEC deal signed a year ago in Vienna.

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