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Oil prices gain despite jump in US inventories
[NEW YORK] Oil prices edged higher Wednesday as speculation of a potential producer deal to limit output offset a jump in US petroleum inventories.
US benchmark West Texas Intermediate for April delivery rose 26 cents to US$34.66 a barrel on the New York Mercantile Exchange.
In London, Brent North Sea crude for May delivery added 12 cents at US$36.93 a barrel.
US commercial inventories of crude oil rose a lofty 10.4 million barrels for the week ending February 26, according to data released by the Department of Energy.
Inventories of distillate oil, which includes home heating oil, also rose sharply. On the flipside, the data showed that US oil production fell for the 16th straight week.
"The EIA figures were decidedly bearish, there's no doubt about it," said Andy Lipow of consultancy Lipow Oil Associates.
But analysts said prices were lifted by talk among producers of a plan to coordinate a limit to output. Saudi Arabia, Russia and others have said they would abid by such a cap if other producers follow suit.
Tim Evans, analyst at Citi Futures, said the oil market gained "apparent support from a Venezuelan statement promising a meeting between 15 or more oil producers 'soon.'" Lipow also cited a report that Saudi Arabia had sought international loans of US$10 billion as a supporting factor in prices.
"I think the market interpreted that as they're under such financial stress" that they would soon support action by the Organization of the Petroleum Exporting Countries to cut production.