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US oil settles down about 1%, at $50.91 a barrel

An oil pump jack in the oil town of Gonzales, Texas.
Getty Images
An oil pump jack in the oil town of Gonzales, Texas.

Oil prices diverged Thursday, with Brent rising after a power outage closed the UK's largest oilfield and following data showing a fall in crude inventories and strong demand from refineries in the United States.

Meanwhile, U.S. crude futures came under pressure, with traders citing a report by research firm Genscape that forecast inventory builds at the Cushing, Oklahoma delivery point for benchmark West Texas Intermediate.

U.S. light crude, also known as West Texas Intermediate or WTI, closed down 50 cents, or about 1 percent, at $50.91 a barrel. Brent crude for August was up 70 cents at $57.70 a barrel.

Britain's Buzzard oilfield, the most important source of crude oil underpinning the global benchmark Brent, was closed after power supplies failed, traders said.

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It normally pumps 170,000 to 180,000 barrels per day (bpd) but went down in the early hours of Thursday, traders said.

A spokeswoman for Buzzard operator Nexen, a unit of China's CNOOC, declined to comment.

"There was a trip last night," said one crude oil trader, who declined to be identified.

Buzzard is the single biggest contributor to the Forties crude stream, one of four crude grades underpinning the price of over-the-counter Brent, which is linked to Brent futures.

Brent's front-month August futures contract, due to expire later on Thursday, moved to a premium of 30 cents a barrel above the September contract on the Buzzard news, its highest premium for more than two months.

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U.S. crude inventories fell by 4.3 million barrels last week, according to the Energy Information Administration (EIA), as refineries boosted throughput to a record level.

The data suggested demand in the United States, the world's biggest oil consumer, was holding up well and still absorbing fuel at a time of ample global production.

Olivier Jakob, head of Swiss energy consultancy Petromatrix, said U.S. oil demand remained strong, driven by gasoline consumption, which was helping keep U.S. refineries working at full tilt through the northern hemisphere summer.

But the market might not be quite as well balanced later in the year, when maintenance shuts some refineries.

"U.S. crude oil stocks are still at a high level and at risk of seeing increasing builds once refineries go into maintenance in the fall," Jakob said.

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Oil prices have fallen steadily over the last two months and both crude benchmarks are down more than 15 percent from June peaks.

The Organization of the Petroleum Exporting Countries is now producing about 2.5 million bpd more crude than needed, analysts say, filling inventories worldwide.

OPEC oil supply may be about to rise as Iran increases output following a deal with six global powers over its nuclear program.