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Oil Halts Gains Near $51 on Signs US Crude Stockpiles Expanded

14 October 2017

Oil has risen five of the past six weeks on signs that self-imposed supply limits implemented by the Organization of Petroleum Exporting Countries and allied producers such as Russian Federation are gradually draining a surfeit that has weighed on prices for more than three years.

The price of Brent crude oil rose on Thursday's mixed news, ending the U.S. trading session at $57.50 per barrel.

U.S. West Texas Intermediate (WTI) crude futures were at $51.09 a barrel, up 17 cents, or 0.33 percent, from their last settlement.

Brent also rose 2 percent the previous day.

The monthly OPEC oil market report noted that, based on secondary sources, Angola produced 1.641 million barrels in September, a monthly drop of 2,900 barrels, while Nigeria increased production by 50,800 barrels to 1.855 million barrels.

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"According to the IEA's calculation, at the current level of OPEC production there will be no global stock draws next year", said Olivier Jakob, managing director of consultants Petromatrix GmbH in Zug, Switzerland.

Chinese oil imports hit 9 million barrels per day (bpd) in September, data showed.

China's huge imports have been strongly driven by purchases for its strategic petroleum reserves.

OPEC expects its efforts to clear the surplus in oil inventories to finally succeed by the end of the third quarter of next year, said people familiar with the group's internal forecasts.

Baker Hughes will release its weekly North American rig count survey around 1:00 p.m. EDT (1700 GMT).

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Unrest in Iraq and the prospect of a tougher U.S. action on Iran nuclear deal also underpinned prices.

Tensions between the two, which traders fear could cut off oil exports from the region, have been building since Iraqi Kurds overwhelmingly backed independence in a September 25 vote. Instead, he gave the U.S. Congress 60 days to decide whether to reimpose sanctions.

U.S. president Donald Trump is also expected to make an announcement on the Iran nuclear deal, which is due for renewal this weekend.

On Friday, local television reported that tens of thousands of Kurdish fighters had deployed in the Kirkuk oil region to confront possible "threats" from Iraqi forces.

"Such a move could constrain the flow of much-needed foreign investment to Iran's upstream sector, which in turn will be detrimental to oil exports from the country", said Abhishek Kumar, senior energy analyst at Interfax Energy's Global Gas Analytics in London.

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Oil Halts Gains Near $51 on Signs US Crude Stockpiles Expanded