Oil Up as U.S. Crude Build Slows

Crude prices rise after falling as much as 3 percent on Tuesday.

Oil prices firmed on Wednesday after falling by as much as 3 percent in the previous session, as data from an industry group showed a smaller-than-expected build in U.S. crude stockpiles.

The American Petroleum Institute (API) reported a crude build of 1.4 million barrels for the week ended Sept. 9, smaller than the 3.8 million barrel rise expected by analysts.

The U.S. government will issue official inventory data later on Wednesday.

Brent crude futures were trading at $47.34 per barrel at 1021 GMT, up 24 cents from their last settlement.

U.S. West Texas Intermediate futures were up 29 cents at $45.19 a barrel.

"Long suffering oil bulls will now turn nervously to the U.S. EIA's commercial crude inventory numbers," OANDA senior market analyst Jeffrey Halley said. "It was an unexpected undershoot in these numbers last week that set off the rally in crude last week."

Crude prices tumbled on Tuesday after the International Energy Agency (IEA) said slowing oil demand growth amid growing inventories and supplies could signal that the market will be oversupplied at least through the first half of 2017.

Commerzbank said in a note the delay in rebalancing is largely due to a rise in production from members of the Organization of the Petroleum Exporting Countries and that the market would be balanced already if OPEC maintained its production at May's levels.

"Rather than talking about capping oil production as it was planning to do at the end of September, OPEC would be better advised to think about reversing the production growth of recent months," Commerzbank analyst Carsten Fritsch said.

OPEC members are due to meet informally in Algeria this month on the sidelines of the International Energy Forum (IEF). Russia is also expected to attend the IEF.

Gains in crude prices could also be capped by rising crude exports from Libya after the country's National Oil Corporation (NOC) said on Tuesday it would immediately start working to resume crude exports from ports seized in recent days by forces loyal to eastern commander Khalifa Haftar.

Libyan production could be raised to 600,000 barrels per day (bpd) from about 290,000 bpd within a month, further adding to the global crude supply glut.

By Ahmad Ghaddar