Oil steady as high US output balances crude stock draw

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-Investors focused overnight on average daily US oil production jumping to 9.5 million barrels, according to government data, and not the bigger-than-expected drop in crude inventories there.

Oil prices edged up on Wednesday, lifted by declining US crude inventories, although markets were still restrained by general oversupply.

Crude inventories fell 8.95 million barrels in the week to August 11, almost three times analysts' expectations for a decrease of 3.1 million barrels and the largest draw in since the week to September 2.

Brent crude futures are now trading at around $50 per barrel versus around $56 at the beginning of the year.

It contains around 678.9 million barrels of crude oil, according to The Hill.

The report also had bearish elements, as 2.5 million bbl of the draw was on the West Coast, somewhat limiting the market impact of the drop, said David Thompson, executive vice-president at Powerhouse, an energy-specialized commodities broker in Washington.

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Over the last four weeks, crude oil imports averaged 8 MMBPD, down 4.7% from the same four-week period in 2016.

By 4:43pm EST, WTI had rallied slightly, trading at $47.81 with Brent Crude trading at $51.04.

Gasoline stocks were unchanged, compared with analysts' expectations in a Reuters poll for a 1.1 million-bbl drop. However, recent data showed OPEC production rose in July because of weaker compliance with the accord as well as a resurgence in output in Libya and Nigeria.

United States production reached just over 9.5 million barrels a day last week, an increase of around 100,000 barrels per day on the prior week and the strongest level since the middle of 2015.

"The rise in crude production continues to happen", said Gene McGillian, director of market research at Tradition Energy.

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