World oil prices up

Nationwide crude stockpiles declined, according to the API data.

January WTI crude oil settled at $57.62, up $0.15 or +0.26% and February Brent crude oil closed at $62.86, up $0.41 or +0.66%. Motor-fuel inventories climbed by 9.2 million barrels last week, the American Petroleum Institute was said to report.

At the Multi Commodity Exchange, crude oil for delivery in December was trading sharply lower by Rs 26, or 0.70 per cent, to Rs 3,698 per barrel in 1,601 lots. WTI Crude is now trading at $56.84 per barrel, down 1.35% on the day.

Futures dropped 0.6 percent in NY after rising 0.3 percent on Tuesday. Heating oil, a proxy for diesel, lost 2.6 percent to $1.8650 a gallon.

USA crude production continued to edge higher, with total domestic output at about 9.7 million barrels a day last week, up 25,000 barrels a day, according to the EIA. Supply cuts by the Organization of Petroleum Exporting Countries, Russia and other producers that were extended last week to all of next year have helped lift Brent prices by more than 40% since June.

Prices have slipped from November's peak, which represented two-year highs.

"If you extend the production-cut agreement through the end of 2018, that surplus will basically erode away, which will be a good thing for oil prices in the long-term", Rob Thummel, managing director at Tortoise Capital Advisors LLC, which handles $16 billion in energy-related assets, said in a Bloomberg Television interview.

Barrel is the unit of measurement of oil volume. "This is likely to change as we approach 2018", Slavov said in a note.

US oil production has climbed by 15 percent since mid-2016 to 9.7 million bpd, close to levels of top producers Russian Federation and Saudi Arabia. An extension had been largely priced in but rising USA oil production has been a key concern for the market. "There's only going to be more production coming which is very problematic for OPEC non-OPEC deal adherence", said John Kilduff, partner at Again Capital in NY.

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