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Oil holds above $52 as US stockpile drop counters export surge

London - Oil stayed near $52 a barrel as traders took stock of data that showed a surprise decline in US crude inventories while  exports surged to a record, potentially spurring producers to ramp up output that’s already the highest in more than two years.

Futures added 0.2% in New York after rising 0.5% on Wednesday. Crude inventories fell by 1.85 million barrels last week after analysts surveyed by Bloomberg forecast an increase. US exports jumped 61% to 1.49 million barrels a day, the Energy Information Administration (EIA) reported. In Libya, production neared the 1 million-barrel-a-day mark as disruptions eased.

Oil has entered a bull market on forecasts for rising crude demand, the return of US Gulf Coast refiners after Hurricane Harvey, and as Turkey threatened to halt Kurdish crude exports through its territory.

The Organisation of Petroleum Exporting Countries and Russia are urging producers to stay the course with promised supply curbs as a glut starts to drain, yet prices above $50 in America will boost shale output, according to Commerzbank.

“The rally has run out of steam for now,” said  Carsten Fritsch, an analyst at Commerzbank in Frankfurt. “The rise in US oil production and exports were bearish news because it shows that US crude has become highly competitive with the large price discount versus Brent and that could be an incentive for producers to ramp up output.”

West Texas Intermediate for November delivery was at $52.23 a barrel on the New York Mercantile Exchange, up 9 cents, at 10:47. Total volume traded was about 24% below the 100-day average. Prices increased 26c to $52.14 on Wednesday.

Brent for November settlement was little changed at $57.92 a barrel on the London-based ICE Futures Europe exchange, after losing 54c on Wednesday. The global benchmark crude traded at a premium of $5.70 to WTI. The spread rose to the widest since June 2015 earlier this week.

Oil-market news:

• US oil production increased by 37 000 barrels last week to 9.55 million barrels a day, the EIA said on Wednesday.

• While that’s the smallest gain this month, output is at the highest since July 2015.

• Libya is producing about 950 000 barrels a day after disruptions ended at its biggest field, Sharara, according to a person familiar with the matter.

• The nation was pumping 1.05 million barrels a day in August.

• Production lost to OPEC and non-OPEC cutbacks will be offset by greater volumes from new fields and softening decline rates from legacy producers, Fitch Ratings’ BMI Research said in a note on Wednesday.

•  Decline rates at non-OPEC conventional fields have held steady at about 5% since 2015 and are likely to stay at that level until 2020, industry consultants Wood Mackenzie said in a report on Wednesday.

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