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By Scott DiSavino
NEW YORK (Reuters) - Oil prices climbed more than 1 percent on Thursday due to a threatened strike in Nigeria and as traders cover shorts after sharp losses the previous day brought on by an unexpectedly large rise in U.S. stocks of refined fuels.
"Short covering in the market, together with the threat of a strike by Nigeria's key oil union, has provided some support to oil prices in today's session," said Abhishek Kumar, senior energy analyst at Interfax Energy's Global Gas Analytics in London.
The previous day, Brent settled down 2.6 percent and WTI down 2.9 percent after an unexpected rise in U.S. fuel stocks.
Data from the Energy Information Administration (EIA) on Wednesday showed that U.S. crude oil inventories fell by 5.6 million barrels in the week to Dec. 1, to 448.1 million barrels
But gasoline stocks
"It was a sharp correction yesterday, so it's a bit of a pause today," said Olivier Jakob, managing director of PetroMatrix, adding "technically, it's still very weak."
PVM Oil Associates also said in a note that "the weekly data was not as bad as it seems at first sight."
"Current (stock) levels are nearly 7 percent below last year and the surplus to the five-year average is only 3.9 percent," it said.
But troublingly for oil bulls, U.S. oil production
Soaring U.S. output threatens to undermine efforts led by the Organization of the Petroleum Exporting Countries (OPEC) and Russia to bring production and demand into balance following years of oversupply.
Sukrit Vijayakar, managing director of energy consultancy Trifecta, said there were "darker shadows over the pace of rebalancing, if ... any is taking place."
(Additional reporting by Amanda Cooper and Libby George in London and Henning Gloystein in Singapore; Editing by Marguerita Choy and Adrian Croft)
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)