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Johannesburg - Oil traded near the highest close in more than 10 months before US government data forecast to show crude stockpiles dropped for a third week, trimming a glut.
Futures were little changed in New York after advancing 2.2% on Monday, the biggest gain in three weeks. Inventories declined by 3 million barrels through June 3, according to a Bloomberg survey before data from the Energy Information Administration on Wednesday. Eni SpA said 65 000 barrels a day of supply was halted Friday after a militant attack in Nigeria.
Crude has surged about 90% from a 12-year low in February amid unexpected disruptions and a continuous slide in US output, which is under pressure from the Organisation of Petroleum Exporting Countries’ policy of pumping without limits. Saudi Arabia will maintain the same level of production capacity until 2020 under a new economic reform plan approved by the government to reduce its reliance on oil.
“US crude production is trending lower,” which is “gradually bringing down the surplus production and putting an end to stockpiling,” Jens Naervig Pedersen, an analyst at Danske Bank A/S in Oslo, said by e-mail. “This is an underlying supportive factor” for the coming year.
West Texas Intermediate for July delivery was at $49.91 a barrel on the New York Mercantile Exchange, up 22 cents, at 10:57 London time. The contract gained $1.07 to $49.69 on Monday, the highest close since July 21. Total volume traded was about 38 percent below the 100-day average.
Brent for August settlement rose 23 cents to $50.78 a barrel on the London-based ICE Futures Europe exchange. Prices on Monday closed at the highest since October 9. The global benchmark crude traded at a premium of 40 cents to WTI for August.
Crude stockpiles at Cushing, Oklahoma, the delivery point for WTI and the biggest US oil-storage hub, probably declined by 700,000 barrels last week, according to the median estimate in a Bloomberg survey. Nationwide inventories dropped by 1.37 million barrels to 535.7 million through May 27, according to the EIA.
