Crude Oil Prices Consolidate Gains, Supply Issues Remain Crucial

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USA light crude oil was $1.28, or 2.8% higher at $47.16 US a barrel.

Saudi Arabia told Asian refiners of its first cuts in crude allocations since OPEC's output reduction took effect in January.

Industry group American Petroleum Institute reported that crude prices also gained support by the fall in U.S. inventory, a 5.8 million barrel decline.

The Organization of the Petroleum Exporting Countries (OPEC) members made a decision to reduce output by 1.8 million barrels per day to rebalance the oil market for the first six months of this year.

In an overnight trade, crude futures also climbed sharply during the session on Wednesday as investors were enthusiast with the latest report from the Energy Information Administration (EIA), which revealed US crude inventories declined more than expected.

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It has since recovered to more than $50 and headed close to $60, helped by a decision by oil-producing nations at the end of previous year to curb production.

"That is exactly what we got yesterday as the report showed falling stocks of oil and fuel combined with lower imports", he said. The surprise decrease in gasoline and distillate inventories also helped mitigate worries that USA commuters weren't soaking up enough gasoline to offset supply.

Gasoline stocks USOILG=ECI fell 150,000 barrels, compared with expectations in a Reuters poll for a 538,000-barrel drop.

Opec is due to meet later this month in the hope of striking a second deal to secure a year of production cuts.

Gasoline demand also perked, as USA gasoline futures were up 2.4% after the report.

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Iraq - OPEC's second-largest producer and a country that relies on oil revenues for almost 95 percent of its budget - committed to reduce daily production by 210,000 barrels to 4.351 million.

Consequently, the EIA has revised the Brent and WTI prices down for 2017, to $52.6 and $50.68 per barrel respectively.

WTI has been under pressure for the last several weeks.

On the New York Mercantile Exchange, crude futures for June delivery climbed 0.49% to settle at $47.56 a barrel, while on London's Intercontinental Exchange, Brent added 0.44% to end at $50.44 a barrel.

The Organisation of Petroleum Exporting Countries (OPEC) has called on USA shale oil drillers to cut output for the prosperity of global economy.

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