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Oil pares gains after U.S. crude stocks build to record high

Oil prices were largely steady on Wednesday, paring gains and briefly turning negative, after crude inventories in the United States rose to a record high. U.S. crude stockpiles rose 1.5 million barrels last week, less than forecast, but touching a record high at 520.2 million barrels after eight straight weekly builds.[EIA/S]The consecutive increases have fueled worries that demand growth may not be sufficient to soak up the global oil glut despite a deal by major oil producers to cut output during the first half of the year. Despite the reaction to the data, oil remained locked within a tight trading range. Rising U.S. production has tempered expectations that the market will rebalance as evidence emerges that OPEC producers are complying with an agreement to cut production. "The EIA stats don't offer much in the way of surprises this week," said David Thompson, executive vice-president at Powerhouse, an energy-specialized commodities broker in Washington.

"Lack of weather-generated demand for heating oil will be offset in coming weeks by agricultural demand, but with refineries coming back into service, the market looks capable of meeting any increased demand." By 11:29 a.m. Eastern (1629 GMT), U.S. West Texas Intermediate (WTI) futures for April delivery CLc1 was up 4 cents at $54.05, down from $54.44 earlier in the session.

May Brent crude futures LCOc1 was 7 cents higher at $56.58 a barrel after earlier trading as high as $57.05 a barrel. The Organization of the Petroleum Exporting Countries reduced its oil output for a second month in February, a Reuters survey found, showing the exporter group has boosted already strong compliance to around 94 percent. Heftier cuts by Saudi Arabia and Angola helped offset weaker compliance by other members that agreed to limit their output.

However, oil production in Russia, which pledged to cut its oil output by 300,000 barrels per day under an agreement with OPEC, fell in February to around 11.10 million bpd from over 11.2 million bpd in October, two sources familiar with the data told Reuters, showing weak compliance with agreed supply curbs. The market offered little reaction to news of a rise in North Sea crude supply next month. Loading programs for the four crudes that underpin dated Brent showed a rise to 908,000 barrels per day from March's 884,000 bpd. [O/LOAD]

PSA pays GM $2.3 bln for Opel, sets first recovery goals

PSA Group (PEUP. PA) has agreed to buy Opel from General Motors (GM. N) in a deal valuing the business at 2.2 billion euros ($2.3 billion), creating a new regional car giant to challenge market leader Volkswagen (VOWG_p. DE). The maker of Peugeot and Citroen cars vowed to return Opel and its British Vauxhall brand to profit, with an operating margin of 2 percent within three years and 6 percent by 2026 underpinned by with 1.7 billion euros in joint cost savings."We're confident that the Opel-Vauxhall turnaround will significantly accelerate with our support," PSA Chief Executive Carlos Tavares said in a statement issued by the two carmakers on Monday. By acquiring Opel, the French group leapfrogs rival Renault (RENA. PA) to become Europe's second-ranked carmaker by sales, with a 16 percent market share to VW's 24 percent. Last year, PSA and GM Europe recorded 72 billion euros in revenue and 4.3 million vehicle deliveries between them.

GM will receive 1.32 billion euros for the Opel manufacturing business - 650 million euros in cash and 670 million in PSA share warrants. The Paris-based carmaker and BNP Paribas (BNPP. PA) will pay a further 900 million euros for the Opel financing arm and operate it as a joint venture, fully consolidated by the French bank. The sale of Opel seals GM's exit from Europe. Eight years after coming close to selling Opel to Magna International (MG. TO), the Detroit auto giant has faced investor pressure to offload the business and focus on raising profitability rather than chase the global sales crown currently held by VW.

After fending off 2015 merger overtures by Fiat Chrysler (FCHA. MI) with support from her board, GM boss Mary Barra agreed to target a 20 percent minimum return on invested capital and pay out more cash to shareholders. The two carmakers, which already share some production in an existing European alliance, confirmed last month they were negotiating an outright acquisition of Opel and its British Vauxhall brand by PSA, sparking concern over possible job cuts.

The transaction also sees GM retain most of Opel's pensions deficit, estimated by analysts at $10 billion. Earlier in the talks, the U.S. carmaker had sought to offload a larger share of the liabilities, sources have said. Some smaller pension funds will be transferred to PSA, along with a 3 billion euro payment to cover their full settlement, the companies said on Monday. GM will also take an accounting charge of $4 billion to $4.5 billion in relation to the deal, expected to close in late 2017.