Oil futures climb 1 percent after United States stockpile draw

The contracts fell about 3 percent to three-week lows on Wednesday after news that an increase in Libyan oil production had helped to boost OPEC crude output in May, representing the first monthly rise this year.

Brent crude futures were down 61 cents at $50.02 per barrel by 2:00 p.m. (1800 GMT), while U.S. West Texas Intermediate crude futures fell 62 cents to $47.74 per barrel.

The price of oil has continued its downward move despite an agreement between the OPEC and participating N-OPEC producers to extend the current supply cut agreement that aims to reduce global oil supply by 1.76 million barrels per day.

So far, the production-cut agreement has had little impact on global inventory levels due to rising supply from producers not participating in the accord, such as Libya and Nigeria, and a relentless increase in US shale oil output.

Late Tuesday, the American Petroleum Institute said crude oil inventories in the United States, the world's leading economy, declined by more than 8.6 million barrels, far more than the 3.2 million barrel draw forecast by S&P Global Platts earlier this week.

USA consumer confidence unexpectedly fell in May, the second consecutive monthly decline, according to a report from the Conference Board.

Oil futures rose on Thursday after slumping to a three-week low in the previous session, buoyed by a report from an industry body that showed US crude stockpiles had fallen more than expected. The July WTI crude oil price range for May is $44.13 to $52.00.

Crude stockpiles were down to 6.4 million barrels in the week to May 26, beating analyst expectations for a decrease of 2.5 million barrels.

Certain OPEC members, such as Libya and Nigeria, and shale oil producer the United States are not part of the agreement, leaving room for further production growth from these exporters.

Domestic gasoline and diesel prices are expected to drop next week, after two consecutive weeks of increases, amid renewed concerns over a global supply glut in the worldwide oil market, market sources said Friday.

November's deal between the Organization of the Petroleum Exporting Countries and non-OPEC members like Russian Federation has been slow to take hold, as many nations sold inventory out of storage before truly cutting exports.

Collective output by OPEC and other producers will be held around 1.8 million barrels per day (bpd) below its level at the end of previous year.

Sechin, a close ally of President Vladimir Putin, expects shale oil output to increase by about 1.5 million barrels a day in 2018, close to the entire cut targeted by OPEC and its allies.

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