Finance

Oil edges lower as U.S. crude inventories fall less than expected

Oil edges lower as U.S. crude inventories fall less than expected

But crude prices retreated Wednesday as US output continues to rebound.

"The fact that gasoline stocks rose... anxious traders that demand is not as strong as many thought", said Greg McKenna, chief market strategist at futures brokerage AxiTrader.

West Texas Intermediate for May delivery dropped 73 cents, or 1.4%, to $51.68/bbl at 12:33 p.m. on the New York Mercantile Exchange. The contract, which finished at its lowest level since April 7 on Tuesday, is set to expire at Thursday's settlement.

The U.S. Energy Information Administration early Wednesday reported that crude supplies fell by a more-than-expected 1 million barrels for the week ended April 14.

Data from the American Petroleum Institute (API) on Tuesday showed that USA markets remained bloated.

US gasoline stocks posted a counter-seasonal build of 1.5 million barrels, because of rising refining activity. Distillate stockpiles fell a bit more than expected-down 2 million barrels last week.

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Gasoline futures lead the losses the energy futures, with May gasoline RBK7, -3.12% down 1.2 cents, or 0.7%, at $1.699 a gallon.

Price increases came after both crude benchmarks fell over 3.5 percent the previous day following a report of surging gasoline inventories as well as another rise in USA crude oil production to 9.25 million barrels per day (bpd), up nearly 10 percent since mid-2016. Weekly imports from OPEC nations rose by 900,000 barrels, the EIA said. However, still-large inventories and higher output from some producers such as the United States - which is not participating in the supply accord - have limited the rally.

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.

Opec agreed to slash output by 1.2 million barrels a day and non-Opec members led by Russian Federation promised to cut 558,000 barrels a day. Earlier this week, Saudi Arabia's Energy Minister Khalid al-Falih reportedly said it is too early to make a decision on a deal extension.

U.S. Oil prices were down almost 4% through the afternoon on Wednesday and now hover just above the $50 a barrel mark.