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US oil rises above US$45 a barrel for first time since November

[NEW YORK] Oil climbed above US$45 a barrel in New York for the first time since November after US industry data showed a decline in crude stockpiles.

West Texas Intermediate futures climbed as much as 2.3 per cent, extending a gain of 3.3 per cent Tuesday. Inventories dropped by 1.07 million barrels last week, the industry-funded American Petroleum Institute was said to report.

The World Bank boosted its forecast for oil prices this year, projecting that refinery demand will pick up and US output cuts will steepen in the second half of 2016.

"The recent leg higher in oil prices is due to the tightening of the supply side of the market," Jens Naervig Pedersen, an analyst at Danske Bank A/S in Oslo, said by e-mail.

"US production is edging lower, the rig count suggests there's more to come, and the API figures from yesterday pointing to stock draws further confirm this development."

Oil has rebounded, after slumping to the lowest level since 2003 earlier this year, amid signs the global surplus will ease as US production declines. Markets may rebalance by the end of the year, BP Plc Chief Executive Officer Bob Dudley said Tuesday as the company reported a surprise first-quarter profit.

West Texas Intermediate for June delivery rose as much as US$1.01 to US$45.05 a barrel on the New York Mercantile Exchange at 10:43 am London time.

The contract gained US$1.40 to US$44.04 on Tuesday, the highest close since Nov 10. Total volume traded was about 16 per cent below the 100-day average. Prices advanced 8.4 per cent last week.

Brent for June settlement increased as much as US$1.23, or 2.7 per cent, to US$46.97 a barrel on the London-based ICE Futures Europe exchange. The contract gained US$1.26 to US$45.74 a barrel on the on Tuesday. The global benchmark crude traded at a premium of US$1.91 to WTI.

Crude stockpiles at Cushing, Oklahoma, the delivery point for WTI and the biggest US oil-storage hub, increased by 1.9 million barrels last week, the API reported Tuesday, according to a person familiar with the numbers.

Nationwide inventories are forecast to expand by 1.75 million barrels, according to the median estimate in a Bloomberg survey before an Energy Information Administration report Wednesday.

Crude prices will average US$41 per barrel this year, which is still down 19 per cent from 2015, Washington-based World Bank said Tuesday in its quarterly commodity-markets outlook.

There's "always a chance" for an agreement to freeze oil output, but no concrete moves over the past week, Russian Energy Minister Alexander Novak told reporters in Moscow.

YPF SA is set to export crude oil from Argentina for the first time in two years next month, taking advantage of a new government subsidy.

BLOOMBERG