Oil down slightly in choppy session on mixed USA crude stocks data

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Rising U.S. output, as well as seasonally low demand, mean U.S. crude inventories rose by 1.2 million barrels in the week to March 9 to 428 million barrels, the American Petroleum Institute said on Tuesday.

Net U.S. crude imports fell last week by 407,000 barrels per day.

On Monday, the EIA said production from major USA shale formations should rise by 131,000 barrels per day in April vs. the previous month to an all-time high of 6.95 million bpd.

"We are now only two to four weeks away from when weekly oil inventory data will start to draw again which should be supportive for oil prices", SEB commodities strategist Bjarne Schieldrop said. The total OECD commercial stocks dropped 206 million barrels compared to the same time one year ago, OPEC said.

The group also reported the first increase in oil inventories across the world's most industrialised nations in eight months in January, a sign the impact of its coordinated output cuts may be slowly waning, and cut its forecast for demand for its own crude.

US crude futures fell 0.8% to $60.23 a barrel, with Brent crude down 0.8% at $64.15.

Despite this, oil markets remain relatively weak.

The U.S. supply increase is expected to come as the Organization for Petroleum Exporting Countries, dominated by oil giant Saudi Arabia, works with Russian Federation to slash output after prices for crude plummeted to around $30 per barrel in 2016 from over $100 two years earlier. Prices have not returned to their January highs of over US$70 per barrel for Brent and nearly US$67 for WTI.

The Organisation of Petroleum Exporting Countries acknowledged the scale of the shale boom, forecasting for the first time that supply growth from rivals will outstrip the increase in demand this year.

The increases in United States production has this year exceeded the supply cuts led by the Organization of the Petroleum Exporting Countries (Opec), which have been in place since 2017 in an effort by the cartel, and supported by non-Opec member Russian Federation, to prop up prices.

Venezuela's oil production plunged by another 52,400 bpd in February over January and averaged 1.548 million bpd last month.

The EIA's report Wednesday showed that total USA crude output edged up by 12,000 barrels to 10.381 million barrels a day last week.

The weekly oil release follows news of an uptick in USA shale deals.

That would be a reversal from a supply deficit in 2017 and early 2018.