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US crude settles at $46.78 per barrel, down 1.6%, despite a big inventories drawdown

Oil jack pumps are pictured in the Kern River oil field in Bakersfield, Calif.
Jonathan Alcorn | Reuters
Oil jack pumps are pictured in the Kern River oil field in Bakersfield, Calif.

Crude prices closed lower on Wednesday despite bullish inventory data.

U.S. crude stocks fell for the seventh consecutive week last week, while gasoline and distillate inventories rose, the Energy Information Administration said on Wednesday.

Crude inventories fell by 8.95 million barrels in the last week, nearly three times analysts' expectations for a decrease of 3.1 million barrels.

West Texas Intermediate futures for September delivery settled down 77 cents, or 1.62 percent, at $46.78 per barrel.

Refinery crude runs fell by 9,000 barrels per day, EIA data showed. Refinery utilization rates slipped by 0.2 percentage points.

Gasoline stocks were unchanged, compared with analysts' expectations in a Reuters poll for a 1.1 million-barrel drop.

Distillate stockpiles, which include diesel and heating oil, rose by 702,000 barrels, versus expectations for a drop of 572,000 barrels, the EIA data showed.

U.S. crude imports rose last week by 194,000 barrels per day.

More broadly, analysts said ample supplies were preventing prices from moving much higher.

"Excessive supply ... is continuing to weigh on oil prices ... Not a lot has changed despite the OPEC and Russia efforts recently. While these producers have tried to limit their oil output, U.S. shale oil continues to rise," said Fawad Razaqzada, an analyst at futures brokerage Forex.com.

The Organization of the Petroleum Exporting Countries together with non-OPEC producers including Russia have pledged to restrict output by 1.8 million barrels per day between January this year and March 2018.

Offsetting much of that effort, however, U.S. oil production has soared by almost 12 percent since mid-2016 to 9.42 million barrels per day.

"OPEC and Russia still face an uphill battle in reducing the global supply surplus in the face of growth in output elsewhere and less than compliant behavior in their midst (Iraq, UAE)," French bank BNP Paribas said.