Oil Prices Give Up Gains As Crude Supply, Production Rise

US crude falls 1% on concerns over rising output

Oil edges up on strong China data, but rising US output caps gains

US crude futures fell 0.8% to $60.23 a barrel, with Brent crude down 0.8% at $64.15.

Brent for May settlement sank 31 cents to close at US$64.64 a barrel on the London-based ICE Futures Europe exchange.

Oil prices stabilised early on Wednesday after posting two days of falls at the start of the week.

The U.S. supply increase is expected to come as the Organization for Petroleum Exporting Countries, dominated by oil giant Saudi Arabia, works with Russian Federation to slash output after prices for crude plummeted to around $30 per barrel in 2016 from over $100 two years earlier. This week, the API reported a draw of 1.262 million in gasoline stockpiles, largely in line with the 1.176-million-barrel draw that analysts had expected.

Moody's said oil prices have firmed since OPEC's November 2016 agreement to cut oil production by 1.2 million barrels per day (bpd), while non-OPEC members, led by Russian Federation, agreed to cut production by 558,000 bpd.

"Libyan oil loadings have been suspended, that's why the market is rallying at the moment", PVM Oil Associates analyst Tamas Varga said. That's nearly a 1-million bpd rise in just a bit over two months.

Rising U.S. output, as well as seasonally low demand, mean U.S. crude inventories rose by 1.2 million barrels in the week to March 9 to 428 million barrels, the American Petroleum Institute said on Tuesday. The result has been a decline in global crude inventories, which has contributed to higher oil prices.

^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ GRAPHIC: Russia vs Saudi vs USA oil production http://reut.rs/2FrFVMF GRAPHIC: World oil supply and demand balance http://reut.rs/2FIxGvP ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^.

Other shale producers such as Britain, Canada, Brazil and China are also expected to boost output, OPEC said in its monthly report.

Official weekly US crude oil production and inventory figures are due to be published by the Energy Information Administration (EIA) later on Wednesday.

This offered modest support to the Brent price, which has fallen by about 1 percent so far this week on concerns that coordinated supply cuts by OPEC and its partners might not be enough to offset the relentless rise in US crude production.

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