Oil prices were little changed on Wednesday in a volatile session as the market mulled U.S. government data showing that while there were signs a crude glut may be receding, crude inventories remain large with gasoline demand weak.
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U.S. West Texas Intermediate (WTI) crude was down 1 cent at $47.65 a barrel at 1:49 EDT (1849 GMT). Benchmark Brent crude was up 14 cents at $50.60 a barrel.
WTI tumbled early to $47.30, the lowest since March 27, following data from the U.S. Energy Information Administration (EIA) showing weekly crude stocks fell by 930,000 barrels to 527.8 million. That was less than half the forecast draw of 2.3 million barrels.
EIA data also showed gasoline stocks rose by 191,000 barrels, which was much less than the 1.3 million-barrel gain that had been forecast. However, gasoline demand slipped 2.7 percent over the last four weeks from the same period a year ago.
"This is continuing a trend since the beginning of the year in which sales have been lower and that is casting a shadow on the market and pressuring crude oil prices," said Andrew Lipow, president of Lipow Oil Associates in Houston.
"Gasoline demand is going to be the story going forward."
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But Kyle Cooper, consultant ION Energy in Houston saw "a slightly bullish report" when looking at the total inventory comparisons.
"With the (Strategic Petroleum Reserve) drawing, total U.S. petroleum stocks fell 161,000 barrels. Total U.S. inventories fell further below last year while the surplus to the five-year average fell. Total U.S. petroleum demand rose to almost 19.9 mbd and the highest since March 3," he said.
While the market remains fixated on U.S. production, oil investors kept watching whether producing countries have been complying with their 2016 deal to cut output around 1.8 million barrels per day (bpd) by the middle of the year.
Russia, contributing the largest production cut outside OPEC, said that as of May 1, it had curbed output by more than 300,000 bpd since hitting peak production in October.
This means Russia has achieved its reduction target a month ahead of schedule, just as the latest Reuters survey of OPEC production showed the group's compliance had fallen slightly.
More oil from Angola and higher UAE output than originally thought meant OPEC compliance with its production-cutting deal slipped to 90 percent in April from a revised 92 percent in March, the Reuters survey showed.
(By Julia Simon; Additional reporting by Karolin Schaps in London and Naveen Thukral in Singapore; editing by David Gregorio)