Oil up on falling U.S. inventories, Saudi cuts to Asia

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However, as Reuters points out, high US gasoline inventories have caused some concern because consumer spending expectations hit a three-year low in April, while new auto sales have fallen year-on-year for four months in a row.

By 11:12 a.m., US crude futures CLc1 were up $1.30, or 2.8 percent, at $47.18 a barrel, and Brent crude LCOc1 rose 2.5 percent, or $1.25, to $49.98 a barrel.

Venetis did not outline what "brisk" demand should consist of, but presumably it's more than what the U.S. Energy Information Administration on Tuesday forecast: it raised its 2017 world oil demand growth forecast by 70,000 barrels per day (bpd) to 1.56 million bpd.

Higher crude output from the United States should limit any upside to global oil prices through the end of 2018, the US government said on Tuesday.

The energy component was already trading higher on Wednesday after data released by the American Petroleum Institute late Tuesday showed USA inventories fell by 5.79 million barrels. Moreover, distillate stockpiles dipped 1.6 million barrels, compared to analysts expected 1 million drop. US light crude oil was up 75 cents at $48.08.

OPEC and other producers including Russian Federation have agreed to cut output by nearly 1.8 million barrels per day (bpd) during the first half of the year to try to reduce a global fuel glut.

Saudi Arabia's energy minister Khalid Al-Falih said on Monday, May 8 that oil markets were rebalancing after years of oversupply, but that he still expected an OPEC-led deal to cut output during the first half of the year to be extended to all of 2017, Reuters reports.

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Official numbers on weekly USA crude and product inventories from the EIA are scheduled to be released 1430 GMT on Wednesday.

Saudi Aramco's decision to reduce oil supplies to Asia has seen prices rally again after recent declines.

However, after Brent fell below $50 a barrel last week, analysts said producers felt forced to act.

Brent LCOc1 was 30 cents higher at $50.52 a barrel by 0715 GMT.

In a report on Thursday OPEC announced group production was down in April. "OPEC has said it will try and extend its output cuts beyond June".

As a result, USA crude oil production surpassed 9 million barrels of oil a day in February which is 500,000 barrels of oil a day higher than the low seen in September 2016. "An extension of the supply deal beyond June looks likely but its effectiveness will remain questioned".

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