Oil held losses near the lowest close in more than three weeks as investors weigh expanding US crude output against an extended decline in stockpiles during a period of strong seasonal demand.
Futures were little changed in New York after falling 4.2 percent the previous three sessions. Production had its biggest weekly gain since the end of June, climbing to the highest level since July 2015, according to Energy Information Administration data Wednesday. The increase offset an 8.95-million-barrel decline in crude stockpiles, the biggest drop since September.
Oil this month has fluctuated in the tightest range since February as output cuts by the Organization of Petroleum Exporting Countries and its allies drain a global glut slower than expected. While U.S. stockpiles have declined for seven weeks, they still remain about 80 million barrels above the five-year average.
“Production is climbing, but demand is high,” said Tushar Tarun Bansal, director at Ivy Global Energy. “Prices are not looking weak, or that they will drop to $40 or $45 in the short term. The market looks reasonably supported.”
West Texas Intermediate for September delivery was at $46.91 a barrel on the New York Mercantile Exchange, up 13 cents, at 12:30 p.m. in Hong Kong. Total volume traded was about 39 percent below the 100-day average. Prices lost 77 cents to $46.78 on Wednesday, the lowest close since July 24.
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Brent for October settlement added 26 cents to $50.53 a barrel on the London-based ICE Futures Europe exchange. Prices decreased 53 cents, or 1 percent, to $50.27 on Wednesday. The global benchmark crude traded at a premium of $3.46 to October WTI.
U.S. crude output rose by 79,000 barrels a day last week to 9.5 million a day, the EIA reported. Crude stockpiles at Cushing, Oklahoma, the delivery point for WTI and the biggest U.S. oil-storage hub, expanded a second week to 57 million barrels. Gasoline inventories climbed by 22,000 barrels to 231 million.
A U.S. government auction of offshore oil and gas leases in the Gulf of Mexico drew just $121 million in bids on Wednesday, a 56 percent drop from a March auction that offered less acreage.