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A woman walking on a street is reflected on a switched off electronic board showing the Kazakhstan tenge's exchange rate against the U.S. dollar and euro in Almaty, Kazakhstan, August 20, 2015. REUTERS/PAVEL MIKHEYEV

Oil down about 2 percent after large U.S. crude build

NEW YORK – Oil prices fell about 2 percent or more on Thursday after the U.S. government reported a larger-than-expected crude stockpile build, although a big drawdown in gasoline helped limit some of the market’s downside.

The Energy Information Administration (EIA) said crude inventories rose by 7.6 million barrels for the week ended Oct 9. [EIA/S]

That was more than double the build of 2.9 million barrels expected by analysts in a Reuters poll, although lower than the 9.3 million barrels indicated by industry group American Petroleum Institute (API) in a report on Wednesday. [API/S]

The crude build comes amid lower processing of oil in the United States as refiners shut for seasonal maintenance after the peak summer driving season.

The EIA said gasoline stockpiles fell by 2.6 million barrels as less of the motor fuel was turned out last week.

That helped cushion some of the bearish impact on crude prices, said analysts.

“The rebound in gasoline demand is the bright spot in this report,” said Matt Smith, director of commodity research for Clipper Data, an energy database and consultancy.

Related: Qatar energy minister says oil prices have bottomed out

Thursday’s slide, however, extended this week’s pressure on prices of U.S. crude and global benchmark Brent, both down since Monday on worries of record OPEC production.

U.S. crude’s front-month contract, November, was down $1.14, or 2.4 percent, at $45.50 a barrel by 11:38 a.m. EDT (1538 GMT). It was down 8 percent on the week.

Brent’s most-actively traded contract, December, fell by 80 cents, or 1.6 percent, to $48.89 a barrel. It was down 7.6 percent on the week.

Brent’s November contract, which will expire as front-month at Thursday’s settlement and replaced thereafter by the December contract, fell 73 cents to $48.42 a barrel.

Oil prices saw some support earlier on Thursday from Chinese crude imports data, which showed a near 9 percent hike from January through September.

While relentless OPEC supply was weighing on the market, some analysts think oil may be headed higher in the near-to-medium term due to lagging U.S. shale oil output.

“We believe the downside potential for oil prices is limited and expect to see moderately rising prices in the coming weeks and months,” said Carsten Fritsch at Commerzbank.

“After all, there are increasing signs that non-OPEC supply is already decreasing noticeably as a consequence of the low prices.”

(Additional reporting by Simon Falush in London and Meeyoung Cho in Seoul and Henning Gloystein in Singapore; Editing by William Hardy and Chris Reese)

Copyright (2015) Thomson Reuters.

This article was written by Barani Krishnan from Reuters and was legally licensed through the NewsCred publisher network.

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