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US oil prices edge up on reports of falling inventories, higher refinery runs
[SINGAPORE] US crude oil prices edged above US$41 a barrel in early trading in Asia on Wednesday following reports of falling stockpiles and rising refinery activity, but analysts said the market would remain under pressure for the rest of the year and into 2016.
Industry group American Petroleum Institute (API) said late on Tuesday that US crude stockpiles fell last week by 482,000 barrels due to lower imports and higher refinery runs.
This helped push front-month U.S. crude futures up 39 US cents from their last settlement to US$41.06 a barrel at 0025 GMT. The gain followed an over US$1 fall during the previous session.
Official inventory data is due later on Wednesday from the US government's Energy Information Administration (EIA).
Despite the slight gains on Wednesday, most analysts expect prices to remain at low levels for the rest of the year and into 2016 as production continues to outpace demand.
"While the growth in US unconventional production appears to be slowly abating, the upsurge in Organisation of the Petroleum Exporting Countries (Opec) output, robust global stock levels, and ongoing uncertainty around the strength of demand suggest that the oversupply and surpluses are likely to continue well into next year, exerting continued downward pressure on prices," the Center for Strategic and International Studies said in its 2016 outlook on Wednesday.
Analyst estimates for oversupply in 2015 range from 0.7 to 2.5 million barrels of oil being produced per day in excess of demand.