Oil nears $50 as data show US crude stockpile falling

Oil extended its advance to near $50 a barrel as weekly US industry data showed crude stockpiles declined, easing a glut. Futures rose as much as 1.7 per cent in New York Wednesday, marking a third day of gains. US oil inventories, which are near the highest in 80 years, dropped by 5.14 million barrels last week, the American Petroleum Institute was said to report. That would be biggest decline since December. The Energy Information Administration is scheduled to release data later Wednesday.

Oil has surged more than 85 per cent from a 12-year low in New York earlier this year on signs the global glut will ease amid declining supply in Nigeria and non-OPEC countries including the US While some of the world's biggest producers continue to pump crude at near-record levels, the Organisation of Petroleum Exporting Countries is unlikely to set an output target when it meets June 2 as it sticks with Saudi Arabia's strategy of squeezing out rivals, according to all but one of 27 analysts surveyed by Bloomberg.

West Texas Intermediate for July delivery rose as much as 83 cents to $49.45 a barrel on the New York Mercantile Exchange and was at $49.15 at 11:29 am London time. The contract gained 54 cents to $48.62 on Tuesday. Total volume traded was about 23 per cent below the 100-day average.

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Brent for July settlement increased as much as 78 cents, or 1.6 per cent, to $49.39 a barrel on the London-based ICE Futures Europe exchange. The contract rose 26 cents to $48.61 on Tuesday. The global benchmark crude was on par with WTI.

Crude stockpiles at Cushing, Oklahoma, the delivery point for WTI and the biggest US oil-storage hub, declined by 189,000 barrels last week, the API said Tuesday, according to people familiar with the numbers.

Nationwide inventories probably dropped by two million barrels through May 20, according to the median estimate in a Bloomberg survey before the EIA report.

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