Oil falls on $US lift, China demand worry

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EIA expects a rise of 117,000 barrels in September U.S. shale oil output.

- Market participants keenly awaited the latest weekly data from the Energy Information Administration on USA stocks and production, due later on Wednesday. For more crude oil prices, please head over to our Oil Price Charts page. Meanwhile, data released Friday from Baker Hughes BHGE, +0.15% showed that the number of active US rigs drilling for oil edged up by three for the week after a decline of one the previous week.

The price for Brent crude oil was 0.75 percent lower than Monday's close to trade at $50.35 per barrel at 9:15 a.m. EDT.

US crude inventories probably shrank by 3.6 million barrels last week, according to the Bloomberg survey.

In May this year, OPEC producers and 11 participating non-OPEC countries including Russian Federation formally ratified the agreement first drafted last November to cut supplies by 1.76 million barrels per day for an extension.

Gasoline inventories rose by 301,000 barrels for the week ending August 11, compared to analyst expectations that inventories for the fuel would fall by 1.5 million barrels.

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

The recent OPEC/non-OPEC capacity cuts have meant that India has had to diversify its crude suppliers, with state-run refiners making purchases of U.S. crude grades.

International Energy Agency (IEA) in its monthly oil market report indicated that it is not just Libya and Nigeria but the participating countries have produced nearly 470,000 barrels of crude per day, beyond the agreed level.

Libyan production has surged in the past year, surpassing 1 million bpd at the end of June for the first time since 2013, but output remains vulnerable to local protests. "This is not the report that [the Organization of the Petroleum Exporting Countries] wanted to see", said James Williams, energy economist at WTRG Economics. Energy Information Administration said it expects to see a climb in crude output from key us shale regions of 117,000 barrels a day in September to 6.149 million barrels a day. Even so, Citigroup Inc.'s Ed Morse says shale will win over OPEC on oil, as USA drillers can survive due to hedging.

The release of the report tripped oil prices and saw them trading around $51/bb few hours on Friday after reaching $53 the day before.