Oil prices rebounded from near 2017 lows on Wednesday after preliminary data showed a much larger-than-expected fall in U.S. crude stocks, reviving bullish sentiment about easing oversupply.
Benchmark Brent crude (LCOc1) was up 35 cents at $50.81 a barrel at 1010 GMT. On Tuesday the futures had settled at their lowest since Nov. 30, when the Organization of the Petroleum Exporting Countries decided to cut oil supply.
U.S. West Texas Intermediate (WTI) crude (CLc1) traded at $47.94 a barrel, up 28 cents. WTI had slid 2.4 percent on Tuesday on concerns about falling OPEC compliance with its production-curbing deal.
Data from the American Petroleum Institute (API) assessing closely watched U.S. oil inventories showed late on Tuesday that crude stocks had fallen last week by 4.2 million barrels, nearly double the drop expected by analysts polled by Reuters.
“The API statistics are helping the market recover, but the underlying sentiment is still bearish,” said Tamas Varga, analyst at London brokerage PVM Oil Associates.
The U.S. government releases official inventory data from the Energy Information Administration on Wednesday at 1430 GMT (6.30 a.m. ET).
The data will also provide an update on growth in U.S. oil production, a key factor that has kept a lid on price gains driven by output cuts elsewhere.
“(U.S.) production growth has slowed during the past couple of weeks. If continued today it may also add some glimmer of hope for the bulls, who increasingly have been losing patience,” said Ole Hansen, head of commodities strategy at Saxo Bank.
Oil investors continue to eye producing countries’ compliance with their pledge made in late 2016 to cut production by around 1.8 million barrels per day (bpd) by the middle of the year.
Russia, contributing the largest production cut outside OPEC, said on Wednesday that as of May 1, it had curbed output by more than 300,000 bpd since hitting peak production in October.
Its largest oil producer, Rosneft, said it had contributed just over 70,000 bpd to Russia’s cuts.
This means Russia has achieved its reduction target a month ahead of schedule, just as the latest Reuters survey of OPEC production showed compliance had fallen slightly.
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, the Reuters survey showed.
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