Russian Federation cuts oil output by 200000 barrels a day

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USA crude was 82 cents, or 1.7 per cent, higher at US$50.33 a barrel, after touching US$50.46, the loftiest since March 9.

The IEA sees India as the most important driver of global energy demand growth in the years to come, with its oil consumption expected to rise to about 10 million bpd by 2040.

What the crude import numbers from China and India for the first two months show is that by and large the top producers seem reluctant to cut supplies to major Asian buyers, and that even if they do, other producers seem willing to step into the breach.

US oil prices settled above $50 a barrel on Thursday after almost three weeks of trading below that level, which analysts consider a psychological threshold for the oil industry. Oil capped its biggest weekly increase this year amid speculation Opec will extend its deal to curb output and ease a global glut. "The initial liquidation in net long positions is a concern; it reflects weaker market confidence in oil prices, amid rising US shale investment and production", said Cailin Birch, an analyst at the Economist Intelligence Unit.

However, compliance could be lower by non-OPEC members like Russian Federation, who have officially agreed to participate in the cuts. Total volume traded was similar to the 100-day average. Russian Federation undertook to slash oil production by 300,000 barrels per day starting from January 2017 compared with October 2016 or by 2.7%.

Still, the weekly figures indicate USA oil production has risen above 9.1 million barrels a day, up by 700,000 barrels a day since last summer. The contract gained $0.84 to $50.35 on Thursday, closing above $50 for the first time since March 8. The global benchmark crude closed at a US$2.23 premium to WTI. The Energy Information Administration believes drillers across the country could raise output to 9.44 million barrels a day this year, up by 630,000 compared to the fourth quarter of 2016.

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The nation cut crude output by an average 202,000 barrels a day in March, according to the Energy Ministry.

Nationwide crude stockpiles rose by 867,000 barrels to all-time high of 534 million.

Non-OPEC members led by Russian Federation also vowed in December to reduce their output by a combined 558,000 barrels per day.

OPEC and non-OPEC producers including Russian Federation agreed late past year to cut output by nearly 1.8 million barrels per day in the first half of 2017 to ease a global supply overhang and prop up prices. The supply curbs are gradually restoring the market to balance, the group's Secretary-General Mohammad Barkindo said in a statement this week.

Larger-than-expected drawdowns in USA petroleum-product stockpiles and gains in refinery activity raised expectations of stronger demand for crude.