Shrinking US stockpiles are cold comfort for oil investors

Concurrently, the West Texas Intermediate (WTI) also remained on a technically bearish patch at $42.78 per barrel, up 0.59% or 25 cents, on the previous session's massive sell-off, and down 20% since its February peak.

Oil prices rose on Thursday after USA crude and petrol stockpiles fell, but concern about whether Opec-led output cuts would be able to rein in a three-year glut continued to drag. Front-month prices on Wednesday fell to $42.53, the lowest close since August.

"Prices were pushed a bit too low", Hans van Cleef, senior energy economist with ABN AMRO, said.

Brent crude futures LCOc1 were 9 cents, or 0.2 percent higher, at $44.91 a barrel at 0018 GMT, after falling 2.6 percent in the previous session to their lowest since August a year ago. "The people who believe in higher prices are stepping in". OPEC and other major producers agreed to cut output by 1.8 million barrels per day from January for six months which was recently extended for an additional nine months.

In Libya's case, official confirmation of a 900,000 bpd production level - deemed a four-year high - is awaited, while Nigerian exports are tipped to exceed 2m bpd by August; likely to be the highest on data aggregators' records in almost 17 months, according to Reuters.

A bigger-than-expected cut in United States crude stockpiles reported overnight is also barely shifting the dial.

"?The question is whether OPEC will respond with further cuts or whether it needs to look again at its macro strategy for addressing low prices".

Crude inventories fell 2.5 million barrels in the week to June 16, surpassing analyst expectations for a decrease of 2.1 million barrels, as imports rose marginally by 56,000 barrels per day, the US Energy Information Administration said on Wednesday. In addition to that, the production also increased in the two deal exempted countries, Nigeria and in Libya, over the past five months, which also undermines the efforts made by OPEC producers.

Gasoline stocks dipped 578,000 barrels compared with expectations from analysts for a seasonally unusual 443,000 barrel gain.

Tropical storm Cindy travelling through the Gulf of Mexico, home to about 17 percent of USA crude and 5 percent of dry natural gas output, disrupted some operations, but did little to boost prices. "If they don't do it, the bear market will push the prices even below $40 a barrel".

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