Oil rebounds from near
2017 lows on falling U.S. crude stocks
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[May 03, 2017]
By Karolin Schaps
(Reuters) - Oil prices rebounded from near 2017 lows on Wednesday after
preliminary data showed a much larger-than-expected fall in U.S. crude
stocks, reviving bullish sentiment about easing oversupply.
Benchmark Brent crude was up 35 cents at $50.81 a barrel at 1010 GMT. On
Tuesday the futures had settled at their lowest since Nov. 30, when the
Organization of the Petroleum Exporting Countries decided to cut oil
U.S. West Texas Intermediate (WTI) crude traded at $47.94 a
barrel, up 28 cents. WTI had slid 2.4 percent on Tuesday on concerns
about falling OPEC compliance with its production-curbing deal.
Data from the American Petroleum Institute (API) assessing closely
watched U.S. oil inventories showed late on Tuesday that crude stocks
had fallen last week by 4.2 million barrels, nearly double the drop
expected by analysts polled by Reuters.
"The API statistics are helping the market recover, but the underlying
sentiment is still bearish," said Tamas Varga, analyst at London
brokerage PVM Oil Associates.
The U.S. government releases official inventory data from the Energy
Information Administration on Wednesday at 1430 GMT (6.30 a.m. ET).
The data will also provide an update on growth in U.S. oil production, a
key factor that has kept a lid on price gains driven by output cuts
"(U.S.) production growth has slowed during the past couple of weeks. If
continued today it may also add some glimmer of hope for the bulls, who
increasingly have been losing patience," said Ole Hansen, head of
commodities strategy at Saxo Bank.
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A worker walks past a pump jack on an oil field owned by the
Bashneft company near Nikolo-Berezovka, Bashkortostan, Russia ,
January 28, 2015. REUTERS/Sergei Karpukhin/File Photo
Oil investors continue to eye producing countries' compliance with their
pledge made in late 2016 to cut production by around 1.8 million barrels
per day (bpd) by the middle of the year.
Russia, contributing the largest production cut outside OPEC, said on
Wednesday that as of May 1, it had curbed output by more than 300,000
bpd since hitting peak production in October.
Its largest oil producer, Rosneft, said it had contributed just over
70,000 bpd to Russia's cuts.
This means Russia has achieved its reduction target a month ahead of
schedule, just as the latest Reuters survey of OPEC production showed
compliance had fallen slightly.
More oil from Angola and higher UAE output than originally thought meant
OPEC compliance with its production-cutting deal slipped to 90 percent
from a revised 92 percent in March, the Reuters survey showed.
(Additional reporting by Naveen Thukral in Singapore; Editing by Dale
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