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Oil rebounds on US stocks drawdown, declining OPEC compliance weighs

Published 03/05/2017, 10:44 am
Updated 03/05/2017, 10:50 am
© Reuters.  Oil rebounds on US stocks drawdown, declining OPEC compliance weighs
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SINGAPORE, May 3 (Reuters) - Crude oil prices bounced back on Wednesday as a decline in U.S. inventories underpinned the market, although a dip in compliance with OPEC efforts to reduce output capped gains.

U.S. West Texas Intermediate crude CLc1 rose 48 cents, or 1 percent, to $48.14 a barrel by 0030 GMT. On Tuesday, the market slid 2.4 percent to its lowest close since March 21. Benchmark Brent LCOc1 futures gained 59 cents, or 1.2 percent to $51.05 a barrel.

U.S. crude stocks fell last week, and both gasoline and distillate inventories also dropped, data from industry group the American Petroleum Institute showed on Tuesday. API/S

Crude inventories fell by 4.2 million barrels in the week ended April 28 to 528.3 million barrels, compared with analyst expectations for a decrease of 2.3 million barrels. Crude stocks at the Cushing, Oklahoma, delivery hub fell by 215,000 barrels, API said.

The U.S. government will release its inventory data on Wednesday at 10:30 a.m. (1430 GMT)

"The supply of crude oil continues to decline. This is evident in both spot and forward supply data," commodities brokerage Marex Spectron said in a note.

"Demand remains strong and in spite of lower refinery profitability we see increasing capacity utilization rates."

Production from the Organization of the Petroleum Exporting Countries (OPEC) fell for a fourth straight month in April, a Reuters survey found on Tuesday, as top exporter Saudi Arabia kept production below its target while maintenance and unrest cut production in exempt nations Nigeria and Libya. 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, according to Reuters surveys.

Brent is trading close to its lowest level since late November, when OPEC agreed to cut supply.

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