Oil edges higher as OPEC boost offsets dent from USA supply

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

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

Oil slumped to a two-week low overnight, after United States data showed a smaller-than-expected drop in overall crude stocks and a surprising build in gasoline inventories, which raised worries about excessively high global supply.

Latest data by the Energy Information Administration showed US output rose to 9.25 million barrels a day last week, the highest level since August 2015.

EIA reported crude oil stocks down 1 million barrels and total stocks down 1.1 million barrels from one year ago.

US West Texas Intermediate (WTI) crude futures were also down 4 cents at $52.61 a barrel.

Opec and several other producers including Russian Federation agreed in December to pump less oil in an orchestrated effort to end an oversupply weighing on prices. Crude stocks declined 1.034 million barrels to 532.343 million barrels in the week ended April 14, EIA data showed Wednesday.

The oil market has been caught in a tug-of-war, with OPEC production cuts supporting prices while signs of rising US production have pressured crude on concerns about a glut.

The agreement in Vienna was created to speed the end of the worst oil downturn in a generation by mopping up excess supplies and boost prices, providing some relief to resource-rich nations whose economies have taken a big hit. Brent on the ICE Futures Europe exchange was down 35 cents at $55.01 a barrel.

Brent crude futures were at $53.34 per barrel at 0715 GMT, up 41 cents, or 0.77 per cent, from their last close.

"The market sentiment appears to be that the increases in USA shale production outweighs the OPEC action and the market is keeping the loss we had yesterday", he said. Gasoline consumption also declined by about 1 percent to 9.3 million barrels.

Looking ahead for oil, "the next big market mover looks to be when OPEC meets regarding an extension in production cuts on May 25", said Macaluso.

The Organisation of Petroleum Exporting Countries (OPEC) has said demand for oil around the world is expected to rise.

Citigroup said OPEC output cuts will be able to offset the response of U.S. producers to higher prices.

China's March gasoline output rose 2.5% year on year to 11.24-million tonnes, the highest level since at least April 2014, data from China's National Bureau of Statistics showed on Wednesday, adding fuel into an Asian market that is already well supplied.

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