Oil futures trim gains after smaller-than-expected fall in inventory

On the New York Mercantile Exchange, West Texas Intermediate futures were flirting with $US45 a barrel, down 0.2 per cent from Monday’s settlement.

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“Rising OPEC oil production is also creating downward pressure on prices“, Pugh said.

Crude stocks at the Cushing, Oklahoma, delivery hub fell 51,000 barrels to 57.1 million barrels, the EIA said.

Although analysts noted that China’s overall currency fall was relatively low by historical standards in foreign exchange markets, they were quick to add that China’s case was different.

Oil prices slumped on Tuesday following a jump in the previous session, as China devalued its yuan currency after a run of poor economic data that underscored the market view that fundamentals are too weak to warrant higher oil prices.

This year so far, U.S. crude has lost nearly 20 per cent, extending the 46-per-cent drop in 2014. Gasoline inventories decreased by 1.3 million barrels last week, but are in the middle of the average range.

The world oil market had begun to rebalance as low fuel prices stimulated extra consumption, it said.

Oil prices rose Wednesday, with New York’s price rebounding from six-year lows as the worldwide Energy Agency predicted stronger crude demand amid a supply glut.

Brent futures fell 30 cents at $48.88, while the US crude futures were at $42.87 per barrel, Reuters reported.

“While U.S. crude oil production this year is expected to be 100,000 barrels per day less than previously forecast, oil output is still on track to be the highest since 1972”, EIA Administrator Adam Sieminski said in a statement.

Most traders, however, pinned the massive losses on Monday to the latest evidence that production levels were not going down with oilfield services provider, Baker Hughes on Friday reporting a growth in the number of active oil rigs in the US for the second straight week.

The Paris-based energy observer commented that demand for crude oil has increased at the fastest rate ever, in the past half decade.

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But US crude imports rose by 393,000 barrels per day to 7 million bpd.

A man filling up his car at a petrol station in Rome