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What's Ahead for Oil ETFs, OPEC

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The crude oil prices recovered on Thursday following heavy losses the day before on news U.S. stockpiles rose unexpectedly.

According to the Energy Information Administration (EIA), US crude production averaged around 9m bpd in the first quarter, up almost 200,000 bpd from the previous quarter, and it is expected to reach a record 10m bpd next year.

US gasoline stockpiles probably fell by 50,000 barrels last week, according to the median forecast in a Bloomberg survey before the EIA report. That time, OPEC agreed to slash the output by 1.2 million barrels per day from January 1, while non-OPEC oil producers agreed to reduce output by 558,000 barrels per day starting from January 1 for six months.

Brent crude, the global oil benchmark, fell 0.8% to $47.69 a barrel on London's ICE Futures exchange.

"If we get another drop in USA inventory levels, we might begin to see the emergence of some confidence that 1.8 million barrel cuts will tighten inventories", said Gene McGillian, manager of market research at Tradition Energy.

United States crude inventories probably dropped by 3.5 million barrels last week, a ninth straight decline, according to a Bloomberg survey before the release of data from the Energy Information Administration on Wednesday.

However, some of Monday's price losses were limited as Libya's crude production was pegged at 809,000 barrels per day (bpd) on Monday, down from 827,000 last week due to technical issues, a Libyan oil source told Reuters.

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"It's not clear what impact the spat will have on oil supplies", Citi Futures analyst Tim Evans wrote in a research note Monday.

Persistent gains in USA production also dragged on benchmark crude prices, traders said.

Middle East tensions, however, have eased over the past few days, as Kuwait oil minister Essam al-Marzouq quelled fears about a potential disruption to the Opec led deal, insisting that Qatar was committed to the Opec agreement to restrict supply.

The surge in US exports began in January, the first month of OPEC's cuts.

The U.S. Energy Information Administration (EIA) released its weekly petroleum status report Wednesday morning.

Many traders still see the main reason for low and falling oil prices as bulging supplies from the United States. Output in the American oil patch has surged about 9 percent to 9.3 million barrels over the last eight months.

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