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Oil falls after rise in US inventories, production
[NEW YORK] Oil prices fell on Wednesday after the release of the latest US oil data showed increasing inventories and an unexpected rebound in production.
The Department of Energy's weekly petroleum numbers dented hopes for another drop in US output that could spell a general tightening of global supplies.
New York's benchmark West Texas Intermediate (WTI) for delivery in November fell 72 cents to US$47.81 a barrel on the New York Mercantile Exchange.
Brent North Sea crude for delivery in November, the global benchmark, closed at US$51.33 a barrel in London, down 59 cents from Tuesday's settlement.
WTI, which added more than US$4 in the prior three sessions, had climbed to an intraday high above US$49 on Wednesday before the US government report knocked the wind out of the market.
US crude output, which had fallen by 40,000 barrels per day in the previous week, unexpectedly rose by 76,000 barrels per day in the week to October 2.
Commercial crude inventories jumped by 3.1 million barrels, more than the market estimate of 2.25 million barrels.
That brought inventories to 461.0 million barrels, more than 27 per cent higher than a year ago.
Gasoline inventories grew by nearly two million barrels, exceeding expectations.
Bart Melek of TD Securities said the high level of inventories pressured prices, but the rise in crude production was "the big negative" for the market.
"Our view is the recent rally kind of unwinds," he said.
Wells Fargo analysts said in a research report that "As the slow adjustments in supply and demand in the oil market persist, 2016 is likely to bring more large swings in prices, without much upward price trend."