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Oil steady before US supply data after longest gain of 2017

[LONDON] Oil traded near US$53 a barrel after its longest winning streak this year as estimates showed a decline in record-high US crude stockpiles.

Futures were little changed in New York after rising 5.7 per cent in the previous five sessions. Inventories probably dropped by 1.75 million barrels last week, according to a Bloomberg survey before an Energy Information Administration report on Wednesday.

Saudi Arabia reduced production to 9.9 million barrels a day last month, below levels it committed to under Opec's accord to rebalance world markets, according to a person with knowledge of the data.

Oil has rallied above US$50 a barrel after some members of the Organization of Petroleum Exporting Countries voiced support for an extension of production cuts past June, offsetting rising US output.

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The curbs have stabilised the market, according to Russia, which is among 11 other nations outside the group that have joined in the pact aimed at easing a global glut. Prices this week have also been buoyed by a production outage at Libya's largest oil field.

"People have been picking up on the bullish indicators in the market ahead of the seasonal draw in crude stocks," said David Wech, an analyst at JBC Energy GmbH in Vienna.

West Texas Intermediate for May delivery was at US$53.06 a barrel on the New York Mercantile Exchange, down 2 US cents, at 1.29pm London time. Total volume traded was about 22 per cent below the 100-day average. The contract gained 84 US cents to US$53.08 on Monday, the highest close since March 7.

Brent for June settlement was down 3 US cents at US$55.95 a barrel on the London-based ICE Futures Europe exchange, after rising 74 US cents to US$55.98 on Monday. The global benchmark crude was at a premium of US$2.50 to June WTI.

US crude inventories climbed to 535.5 million barrels at the end of March, the highest in weekly data compiled by the EIA since 1982. While total supplies may have started to fall last week, stockpiles at Cushing in Oklahoma, the delivery point for WTI and the biggest US oil-storage hub, probably rose by 800,000 barrels, according to a forecast compiled by Bloomberg.

"The market has received a healthy boost from Opec and Russia talking about extending the output-cut deal and news of a supply halt out of Libya," said Jens Naervig Pedersen, a senior analyst at Danske Bank A/S in Copenhagen.

"Fundamentals will likely not be able to support prices much further in the short term."