Oil prices mixed in choppy trade, rising United States production weighs

Oil prices mixed in choppy trade, rising United States production weighs

Brent crude futures LCOc1 fell 85 cents, or 1.6 percent, to $54.04 a barrel as of 12:31 p.m. EDT, while US crude futures CLc1 lost 77 cents, or 1.4 percent, to $51.64 a barrel.

Prices for natural gas, meanwhile, fell as the EIA reported a larger-than-expected weekly climb in US supplies of the commodity.

China's March gasoline output rose 2.5 percent year on year to 11.24 million tonnes, the highest level since at least April 2014, data from China's National Bureau of Statistics showed on Wednesday, adding fuel into an Asian market that is already well supplied. This is part of the production cuts that the oil-producing kingdom had agreed to as a member of OPEC. Oil prices will increase as demand improves, chipping away at oil inventories in the second half, he said.

Elsewhere in the energy spectrum, May gasoline tacked on 0.4% to $1.666 a gallon and May heating oil edged up by 0.1% to $1.583 a gallon.

Traders said that the slight gains came on the back of a reduction in commercial U.S. crude stocks, which fell by 1 million barrels last week to 532.34 million barrels, according to the U.S. Energy Information Administration (EIA).

Oil slid more than 1 percent on Wednesday, after USA data showed a counter-seasonal build in gasoline inventories and a smaller-than-expected decline in overall crude stocks coupled with another rise in domestic crude production.

The Organization of the Petroleum Exporting Countries' kingpin Saudi Arabia said the cartel is likely to reach an agreement next month to extend its production cuts. The industry body American Petroleum Institute had reported an increase of 2.254 million barrels in gasoline inventories on Tuesday, setting the stage for crude's slide.

Gasoline prices slipped on the news, as reformulated blendstock futures dropped 0.6 percent to $1.7008.

"Barring a spike in geopolitical tensions.oil prices will simply not be able to materially rally through resistance in the mid $50s (WTI) until the pace of of USA production moderates", said Tyler Richey, co-editor of the Sevens Report. The decline was triggered by the surprise build in US gasoline stockpiles that point to weaker-than-expected demand at a time when consumption of gasoline usually rises.

"Saudi's done a good job of managing the rhetoric", said Michael Hiley, a trader at LPS Futures LLC.

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