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Failing US inventories stabilizing oil price above $50 throughout this week

Due to failing US inventories, oil prices seem be stabilizing at a near eight-week highs since Wednesday. The scenario bolstered expectations that the long-oversupplied market was moving toward balance.

Brent crude futures rose 40 cents to $50.60 a barrel by 1213 GMT after rallying more than 3 per cent on Tuesday. US West Texas Intermediate futures climbed 50 cents to $48.39 a barrel.

US crude stockpiles fell sharply last week as refineries boosted output, while gasoline inventories increased and distillate stocks decreased, the industry group, the American Petroleum Institute noted.

It would be recalled that crude inventories fell 10.2 million barrels in the week ending July 21 to 487 million, more than the expected decrease of 2.6 million barrels.

Data from the US Energy Information Administration (EIA) during the week, provided more support with forecasts of a drop for a fourth week in a row.

Analysts say midweek’s stock draw added to optimism that the long-awaited oil market rebalancing was underway.