Oil prices fall on surging U.S. crude supply, economic slowdown

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Oil prices moved little on Wednesday, supported by supply cuts by producer group OPEC and US sanctions against oil exporters Iran and Venezuela, but pressured by expectations that an economic slowdown could soon dent fuel consumption.

OPEC, Russia and other non-member oil producers agreed to cut output by 1.2 million bpd from January 1 for six months and are set to meet on June 25-26 to decide whether to extend the pact.

US crude oil stocks rose more than expected last week to the highest in almost 17 months as imports climbed, while gasoline inventories posted their steepest drawdown since September 2017, the Energy Information Administration said on Wednesday.

Brent crude futures, the global benchmark for oil prices, were up 33 cents, or half a percent, at $70.94 USA per barrel mid-morning Wednesday.

WTI (oil futures on NYMEX) finally cracked the key resistance-turned-support at 64.00, as the sellers remain in command so far this Thursday, as the sentiment remains weighed down by mounting concerns over the economic slowdown and surging United States crude supplies.

"[Oil markets will remain tight] as long as Saudi Arabia continues to back the production cut deal as aggressively as it has done so far", said Ole Hansen, head of commodity strategy at Saxo Bank.

Current oil demand stands around 100 million bpd.

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US crude stockpiles last week rose to their highest level since November 2017 as imports grew, while gasoline inventories posted the steepest drawdown since September 2017, the Energy Information Administration said.

Crude oil futures settled notably higher on Wednesday as data showing a sharp decline in gasoline stocks in the USA offset a surge in crude stockpiles in the week ended April 5.

Venezuela told the Organization of the Petroleum Exporting Countries that the nation pumped 960,000 bpd last month, a drop of nearly 500,000 bpd from February, OPEC said on Wednesday.

Restrictions at the busiest USA energy port for days after a massive petrochemical fire and spill near Houston led to a backlog of vessels in late March.

It sees U.S. crude oil averaging $59.50 per barrel, up from its last forecast of $55.50.

"Concerns about trade talks linger, and the mood will be influenced by the recent downgrade to global GDP growth by the International Monetary Fund, although it should be noted that the IMF does not expect a recession in the near term".

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