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USA crude oil stocks drop

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US crude imports rose last week by 56,000 barrels per day.

The price of crude oil fell following the release of an industry report which showed that the decrease in inventory in the United States was lower than had been anticipated.

China's March gasoline output rose 2.5 percent year-on-year to 11.24 million tonnes, the highest level since at least April 2014, China's National Bureau of Statistics said, adding fuel into an Asian market that is already well supplied.

Last week the prices of oil had gone past $53 a barrel following the push by some producers to extend the OPEC supply cut deal by the more than 6 months that had been settled on.

U.S. West Texas Intermediate (WTI) crude futures were up 12 cents, or 0.2 percent, to $50.56 a barrel. The May contract expires at settlement, and the more actively traded June contract recently gained 10 cents, or 0.2%, to $50.95 a barrel.

"The domestic increases continue to not only offset overseas production cuts, but potentially more importantly, they also weigh on OPEC's morale as they are watching market share continue to slip away as a result of their own policy actions", he said in his latest report.

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OPEC members Saudi Arabia and Kuwait signaled that the Organization of the Petroleum Exporting Countries and other producers, including Russian Federation, would likely extend their oil output cut beyond June.

Iran was allowed to increase its output under the deal as the nation rebuilds from worldwide sanctions that pressured its energy industry. According to a report on monthly drilling productivity report by the Energy Information Administration, the output of crude from shale plays will increase to a level of 5.2 million barrels per day next month.

"At 532.3 million barrels, U.S. crude oil inventories are near the upper limit of the average range for this time of year".

However, any interpretations of an oversupplied market moving towards a balance become questionable if product stocks start rising, especially gasoline, which should now be seeing a seasonal hump in demand. The decline was mainly due to the surprise build in USA gasoline stockpiles that point to weaker-than-expected demand at a time when consumption of gasoline usually rises.

"Five of the last trading days we've been lower", he said.

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