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Hong Kong - Oil halted its decline near $47 a barrel before US government data forecast to show crude stockpiles extended declines during a period of seasonally strong demand, trimming an inventory overhang.
Futures in New York added 0.6% after slumping 2.4% on Monday. Inventories probably dropped by about 3.5 million barrels last week, according to a Bloomberg survey before an Energy Information Administration report on Wednesday. Libya stopped loadings from its biggest oil field in the latest disruption to the OPEC nation’s crude production and shipments.
Oil in New York has fluctuated below $50 a barrel this month amid concerns a global glut is draining slower than expected as rising output, particularly from the US, offsets production cuts by the Organisation of Petroleum Exporting Countries and its allies. American explorers were pumping at the highest level in two years, according to the most-recent government figures.
“Oil will remain under pressure while we see US production continue to rise, that’s the swing factor,” said David Lennox, a Sydney-based analyst at Fat Prophets.
“Prices will probably remain between $45 and $50 a barrel. To break out of that range we’ll need to see OPEC cut deeper, or demand will have to be more sustainable outside of the seasonally strong period.”
West Texas Intermediate for September delivery, which expires Tuesday, rose 30 cents to $47.67 a barrel on the New York Mercantile Exchange. Total volume traded was about 37% below the 100-day average. The more-active October contract added 27c to $47.80 at 08:40.
Brent for October settlement gained 30c to $51.96 a barrel on the London-based ICE Futures Europe exchange. Prices lost $1.06 to $51.66 on Monday. The global benchmark crude traded at a premium of $4.15 to October WTI.
US crude stockpiles have declined by almost 43 million barrels since the end of June, according to the Energy Information Administration. While inventories have eased, oil production has increased to the highest since July 2015. Output from major shale fields is also forecast to climb to a record next month.
Oil-market news:
Force majeure on shipments from Libya’s Sharara oil field, made through the Zawiya export terminal, was declared on Saturday, state-run National Oil chairperson Mustafa Sanalla said on Monday by phone.
A committee set up to monitor compliance of the OPEC-led cuts is said to see compliance to the agreement at 94% in July, according to two people familiar with the matter.
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