Crude held near a five-month high after US government data showed the biggest decline in gasoline stockpiles since 2017, offsetting an increase in crude inventories.
According to EIA's data, US crude oil production averaged 12.2 million barrels per day (b/d) last week, the same as the previous week and up by about 1.7 million b/d year-on-year.
In the United States, crude oil production has risen by more than 2 million bpd since early 2018, to a record 12.2 million bpd, with many analysts expecting output to exceed 13 million bpd soon.
In spite of the rise in US supply and the financial worries, worldwide oil markets stay tight in the midst of supply cuts led by the Organization of the Petroleum Exporting Countries (OPEC), U.S sanctions on oil exporters Iran and the Venezuela, and growing fighting in Libya. In January, stockpiles of crude oil and gasoline were well above their five-year averages.
Selling accelerated yesterday morning as USA crude dropped below $63.71 a barrel, a technically-significant level at which some funds had stops in place, triggering automatic sales, said Bob Yawger, director of energy futures at Mizuho in NY.
"While U.S. crude stocks built last week, a massive draw on (gasoline) inventories likely buoyed the whole complex", Vienna-based consultancy JBC Energy said.
Supply cuts by OPEC and partners led by Russian Federation, plus involuntary curbs in Venezuela and Iran, have helped drive a 32 percent rally in crude prices this year, prompting pressure from U.S. President Donald Trump for the group to ease its market-supporting efforts.
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Brent futures LCOc1 were at $70.93 per barrel at 1100 GMT, up 32 cents, or 0.44 per cent, from their last close on Wednesday as OPEC cuts and USA sanctions on Iran and Venezuela continued to tighten supply.
"If there was a big drop in supply and oil went up to $85, that's something we don't want to see, so we may have to increase output", one OPEC source said.
US sanctions and power outages pushed OPEC member Venezuela's crude output to a long-term low of 870,000 bpd, IEA says.
OPEC and its allies will meet in June to decide whether to continue withholding supply, and while OPEC's de-facto leader, Saudi Arabia, is seen to be keen to continue cutting, sources within the group said it may raise output from July if disruptions elsewhere continue.
June WTI crude oil is expected to continue to be supported fundamentally by the OPEC-led supply cuts and technically by a major Fibonacci level at $63.48. At the same time, the International Energy Agency (IEA) reported that OPEC production fell 550,000 bpd.
Distillate fuel oil inventories meanwhile dipped by 0.1m barrels and were 6% below their five-year average, although those of propane/propylene did grow by 1.2m barrels.
This marked the 49th time crude oil production in the US showed an increase over the past 64 weeks.