LONDON, March 14 (Reuters) - Oil edged up on Wednesday as strong Chinese factory activity encouraged investor inflows into industrial commodities such as copper, although fast-growing US crude output tempered price gains. China reported a 7.2 per cent year-on-year increase in industrial output in the first two months of the year, roundly beating expectations and, in a dose of support for oil bulls, the data showed crude production fell 1.9 percent. Copper CMCU3 and palladium XPD=, a key component in gasoline-powered vehicles, both rose around 1 per cent, which in turn encouraged a bounce in the oil price. Brent crude LCOc1 was last up 27 cents at $64.92 a barrel, off an earlier low of $64.43, while US West Texas Intermediate (WTI) futures CLc1 were up 31 cents at $61.02 a barrel. "We've seen copper breach above $7,000 (a tonne) ... and I think a lot of this is coming out of this really big beat in the Chinese industrial production, so general macro flows, I would say, are reinforcing that bullish narrative," ING commodities strategist Oliver Nugent said. China is the world's largest importer of commodities and is the world's biggest car market. Chinese oil production fell 1.9 per cent in January and February to a daily rate of around 3.77 million barrels per day, while the amount of crude processed by refineries rose 7.3 per cent to 93.4 million bpd, implying that its import demand will remain strong. Brent crude has fallen by around 1 per cent so far this week, as traders and investors have grown increasingly doubtful that coordinated supply cuts by OPEC and some of its partners might not be enough to offset the relentless rise in US crude production. US oil production C-OUT-T-EIA is expected to top 11 million bpd later this year.
