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Oil markets catch breath after biggest gains in six years

The US government on Monday released new data on domestic oil production for the first half of this year based on improved methodology, showing output was as much as 130,000 barrels per day (bpd) lower than first estimated.

[SEOUL] Crude oil futures were largely steady on Friday after posting their biggest one-day rally in over six years the day before led by recovering equity markets and news of diminished crude supplies.

Stock markets around the world rallied on Thursday, shaking off a slump related to China growth fears, as strong US economic data boosted investor sentiment, and the dollar advanced for a third consecutive session.

Front-month October Brent crude had dipped 20 cents to US$47.36 per barrel as of 0046 GMT. It settled US$4.42 higher at US$47.56 per barrel in the previous session.

US crude edged down 3 cents to US$42.53 per barrel, after ending up US$3.96, or 10.3 per cent, at US$42.56 per barrel, its biggest one-day percentage gain since March 2009. "A short covering rally, led by crude oil pushed commodities higher across the board. Better than expected US GDP numbers was the main spark, although the force majeure on BP's exports from Nigeria extended the gains," ANZ said in a note on Friday morning. "The recovery in commodity prices looks fragile with concerns over China's growth still weighing on market activity,"the bank added.

The US economy grew faster than initially thought in the second quarter on solid domestic demand. Gross domestic product expanded at a 3.7 per cent annual pace instead of the 2.3 per cent rate reported last month, the Commerce Department said on Thursday in its second GDP estimate for the April-June period.

Shell's Nigerian unit, Shell Petroleum Development Company (SPDC), declared force majeure on Bonny Light crude oil exports on Thursday after shutting down two key pipelines in the country due to a leak and theft.

China's falling auto sales have been at the forefront of concerns that its economy is slowing much faster than expected, weighing on oil prices.

Venezuela has been contacting other members of the Organization of the Petroleum Exporting Countries (Opec), pushing for an emergency meeting with Russia to come up with a plan to stop the global oil price rout, the Wall Street Journal reported.