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Oil trades near 3-week low as US Gulf supply rises

Hong Kong - Oil traded near a three-week low below $50 a barrel as US East and Gulf coast crude stockpiles rose along with nationwide production.

Futures were little changed in New York after falling 1.6% on Wednesday. While government data showed total US inventories declined last week, they were pulled down mainly by a supply drop on the West Coast, a region that’s sometimes ignored by traders as its distribution system is isolated from the rest of the country. The nation’s crude output rose for a second week.

Oil has fluctuated near $50 a barrel amid uncertainty about whether the Organization of Petroleum Exporting Countries can implement the first output cuts in eight years at an official gathering in November.

An OPEC committee will meet this week to try to resolve differences over how much individual members should pump, with Iraq saying it should be exempt because of conflict with Islamic militants.

“The oil market hasn’t transitioned from a buyers market to a sellers market just yet,” said Jonathan Barratt, chief investment officer at Ayers Alliance Securities in Sydney. “It’s still in a range and it’s likely to hold near here as we head toward the November OPEC meeting.”

West Texas Intermediate for December delivery was at $49.30 a barrel on the New York Mercantile Exchange, up 12 cents, at 08:46.

The contract slid 78c to $49.18 a barrel on Wednesday, the lowest close since October 4. Total volume traded was about 44% below the 100-day average.

US stockpiles

Brent for December settlement was at $50.16 a barrel, up 18c, on the London-based ICE Futures Europe exchange. Prices slipped 81c, or 1.6%, to $49.98 a barrel on Wednesday, the lowest close since September. 30. The global benchmark traded at an 85c premium to WTI.

US West Coast crude stockpiles declined by 2.3 million barrels last week to 47 million barrels, the lowest level since January 2015, according to a report from the Energy Information Administration on Wednesday. Gulf Coast supplies rose by 2 million barrels. Nationwide inventories were forecast to expand by 2 million barrels, according to a Bloomberg survey.

Oil-market news:

The oil market will rebalance in the second half of 2017 without OPEC intervention, Fatih Birol, the executive director of the International Energy Agency, said in an interview in Mexico City. Cnooc, China’s biggest offshore oil and gas producer, posted a 15% fall in third-quarter sales as output slid with capital spending.

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