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Oil falls for third day as US inventories hit record high

Heftier cuts by Saudi Arabia and Angola helped offset weaker compliance by other members that agreed to limit their output. Compliance by Russia still remains weak.

By: Reuters | Singapore |
March 2, 2017 9:40:34 am

Crude oil fell for a third consecutive session on Thursday as a record build-up in U.S. stockpiles weighed on the market, with producers boosting shale oil production. Crude stockpiles in the United States, the world’s top oil consumer, rose by 1.5 million barrels last week, less than forecast, but touching a record at 520.2 million barrels after eight straight weekly builds.

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U.S. West Texas Intermediate (WTI) futures slipped 10 cents, or 0.2 percent, to $53.73 a barrel by 0249 GMT. Benchmark Brent crude futures gave up 3 cents to $56.33. Still, oil remained locked within a tight trading range as strict OPEC compliance with output cuts offset rising U.S. oil reserves.

“The market is largely a range-bound market, although positioning is quite skewed at present which could mean that when things do pop it could be a violent swing,” said Virendra Chauhan, oil analyst at Energy Aspects in Singapore. “The weakness at present is also a follow through from U.S. inventory statistics which hit a record high yesterday.”

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The Organization of the Petroleum Exporting Countries (OPEC) reduced its oil output for a second month in February, a Reuters survey found, showing the exporter group has boosted already strong compliance to around 94 percent.

Heftier cuts by Saudi Arabia and Angola helped offset weaker compliance by other members that agreed to limit their output. Compliance by Russia still remains weak.

Russian oil production fell in February to around 11.10 million barrels per day (bpd), from over 11.2 million in October, two sources familiar with the data told Reuters on Wednesday. It had pledged to cut its oil output by 300,000 barrels per day in the first half of 2017.

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