Crude Oil Dips After Inventories Data

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The U.S. Energy Information Administration will release official government inventory data later on Wednesday. US West Texas Intermediate crude was trading down 17 cents at $52.30.

The amount of crude in USA storage tanks increased by nearly 900,000 barrels last week, a small build.

Gasoline stockpiles dropped by 5.5 million barrels for the week, while distillate stockpiles fell 5.2 million barrels, according to the EIA. In order to avoid losses, crude oil producers reduce production if oil prices tumble.

"If it wasn't for the increase in demand in refined products, you probably would have seen crude oil significantly lower right now", he said.

RBOB gasoline futures rose 1.2 percent to $1.7359 a gallon, while heating oil, a proxy for diesel and jet fuel, gained 0.6 percent to $1.8332 a gallon. The gap between USA and global price benchmarks has supported some of the largest export levels on record. Analysts had expected a decrease of 2.6 million barrels.

Experts say that is likely to continue as long as the two benchmarks are going their separate ways. People familiar with the matter said Wednesday that Saudi Arabia and Russian Federation want to extend their agreement to limit production through the end of 2018. The group and its partners, which together control more than half the world's crude output, last week sent the strongest signal yet that their deal will be extended beyond the current expiry in March until the end of 2018.

Saudi Arabia, the de facto head of the Organization of Petroleum Exporting Countries, has continued to roll out a "whatever it takes" platform for balancing a market tilted slightly toward the supply side.

Summer Said contributed to this article.

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