Oil futures pull back after eight straight sessions of gains

Oil futures turned negative on Wednesday, pulling back after eight straight sessions of gains, after US crude inventory figures suggested the market was still heavily supplied.

Traders focused on preliminary US production estimates included in the weekly Energy Information Administration report that suggest domestic output is continuing to climb. The report also showed stockpiles at the US crude hub at Cushing, Oklahoma, rose 276,000 barrels in the week.

However, the data did show an unexpected drop in overall US crude inventories, which fell in the week by 2.2 million barrels as imports declined by 717,000 barrels a day.

Brent oil gained for an eighth straight session on Wednesday, having recovered nearly all last month’s losses, after Saudi Arabia was said to be pushing its fellow Opec members and some rivals to prolong supply cuts beyond June.

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Brent crude futures were down 17 cent at $56.06 a barrel in late afternoon trading, having touched a one-month high of $56.65.

US West Texas Intermediate crude futures were down 13 cent at $53.27 a barrel.

The US data followed more bullish data from the Opec nations, which said they had cut March oil output beyond the measures they had promised.

Opec countries cut oil output in March by more than they pledged, according to figures the group published in a monthly report, as it sticks to an effort to clear a supply glut that has weighed on prices.

“What they’re losing in market share the US is looking to pick up,” said Oliver Sloup, market analyst at iitrader.com “I don’t think there’s much room above $55.” – Reuters