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Oil dips after mixed US petroleum supply report

At a time when the oil price is languishing at its lowest level in six years, producers need to find half a trillion dollars to repay debt. Some might not make it.

[NEW YORK] Oil prices dipped on Wednesday after US petroleum data showed lower crude-oil inventories but barely any decline in production despite sinking prices.

US benchmark West Texas Intermediate for October delivery shed 71 cents at US$38.60 a barrel on the New York Mercantile Exchange.

European benchmark Brent oil for October delivery lost seven cents at US$43.14 a barrel in London.

Crude supplies in the United States fell by 5.5 million barrels for the week ending August 21, according to US Department of Energy data.

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However, the report also showed US crude production slipped a scant 11,000 barrels a day, keeping output above 9.3 million barrels, not far from a decades-high production level.

In another bearish indicator, gasoline supplies increased by 1.7 million barrels, the data showed.

"The market continues to try to push off from six- or seven-year lows," said Gene McGillian, broker and analyst at Tradition Energy.

However, after the inventory report came out, "some of the buying pressure evaporated," Mr McGillian said.

US oil prices have fallen below US$40 a barrel this week as worries about the slowing Chinese economy, the world's second-biggest consumer of crude oil after the US, have added to concerns about an already heavily supplied global petroleum market.