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Oil near $62 as U.S. supplies stay ample

Written by: Staff

LONDON, Mar 23 (Reuters) Oil hovered near on Thursday after a U.S. supply report showed the top consumer remains cushioned against potential supply disruptions.

Crude stocks in the world's biggest gas guzzler fell 1.3 million barrels last week, the first drop in six weeks, versus expectations of a 2.5 million barrel rise. But inventories remain near seven-year highs.

Brimming U.S. crude stocks have helped ease a prolonged supply outage in OPEC member Nigeria due to militant attacks and fears that tension over Iran's nuclear work may disrupt exports from the world's fourth-largest oil producer.

''At the moment, the world is awash with oil and we probably are a little bit high,'' said Lee Elliott of Man Financial.

''Basically, we will make another move on the downside. The funds still will come out and sell it.'' U.S. light crude for May delivery, rose 22 cents to .99 a barrel by 1313 GMT (1943 IST). London Brent crude was up 12 cents at .62.

Top oil exporter Saudi Arabia vowed again to guarantee at least 1.5 million barrels of daily spare production capacity to ensure stable global supply.

Saudi Oil Minister Ali al-Naimi said on Wednesday that new oil from the kingdom's Haradh project, the biggest single boost to OPEC output this year, has raised Saudi output capacity to 11.3 million bpd.

Riyadh is now pumping 9.5 million bpd into the 85 million bpd world oil market.

''The aim of the kingdom is to be a trustworthy supplier. We want global stability,'' Naimi told reporters.

Output from OPEC's 11 members in March was expected to slip by 300,000 bpd to 29.7 million bpd after militant attacks hit supply in Nigeria, consultant Petrologistics said on Wednesday.

The figure was down from a revised estimate of 30 million bpd in February, the consultancy said.


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