Oil buoyed by reported US stockpile draw, falling China output

© Reuters
Crude prices gained over one percent on Wednesday, as the American Petroleum Institute (API) reported late Tuesday that US stockpiles fell 3.8 million barrels in the week to October 14. Chinese oil output fell, consolidating price growth.

According to the API, American oil reserves declined to 467.1 million barrels. The official data will be released later on Wednesday by the US Energy Information Administration.

"The American Petroleum Institute crude inventory numbers were released... this has given early Asian trading a bullish start," said Jeffrey Halley, senior market analyst at OANDA in Singapore.

"US refiner margins as a whole are lower in 2016 versus 2015 and Q4 is not likely to be different with higher crude prices and soft product prices due to higher inventories,” Sandy Fielden, director of research, commodities and energy at Texas-based Morningstar said.

The North Sea benchmark Brent was trading at $52.45 per barrel, rebounding from Tuesday's losses. The US crude benchmark West Texas Intermediate reached $51 per barrel.

The Chinese data showed that the world's second-biggest economy was supportive of higher oil prices. While economic growth is still in line with expectations at 6.7 percent, crude output plunged 9.8 percent to 3.89 million barrels per day in September, close to the lowest figure in six years. The country processed 43.8 million tons (10.7 million barrels per day) of oil last month, 2.4 percent more than a year ago.

Prices were also supported by OPEC Secretary General Mohammed Barkindo, when he said he is sure the cartel will cut production during the November 30 meeting, as agreed in Algeria.

OPEC also expects non-members, mainly Russia, to join the deal. Russian President Vladimir Putin said Moscow will join the pact to freeze or even cut oil production, if OPEC members manage to reach consensus.