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Oil rises as US crude stocks seen falling again

Jun 13 2017 12:08
Ben Sharples and Grant Smith, Bloomberg

Hong Kong - Oil advanced for a third day before US government data forecast to show crude stockpiles resumed declines after an unexpected rise.

Futures added 0.4% in New York after advancing 1% in the previous two sessions. Inventories are forecast to have slid by 2.25 million barrels last week, according to a Bloomberg survey before an Energy Information Administration report on Wednesday.

Crude stockpiles expanded for the first time in nine weeks through June 2. Output at major US shale plays will reach a record in July, according to the EIA.

Oil has traded below $50 a barrel amid speculation increased US supplies will counter production curbs by the Organisation of Petroleum Exporting Countries and allies including non-OPEC member Russia. American drillers targeting crude added rigs for the 21st straight week, the longest run of gains in at least three decades, according to data Friday from Baker Hughes.

“The global economic backdrop is very solid, and we have high and solid demand levels,” said Norbert Ruecker, head of commodities research at Julius Baer in Zurich.

Still, “we don’t see these abundant oil inventories disappearing any time soon” and so “prices will keep shuttling around current levels, in the high $40s rather than the low $50s.”

West Texas Intermediate for July delivery was at $46.25 a barrel on the New York Mercantile Exchange, up 17 cents, at 11:39.

Total volume traded was 8% above the 100-day average. Prices gained 25c to $46.08 on Monday.

Brent for August settlement rose 19c to $48.48 a barrel on the London-based ICE Futures Europe exchange. The global benchmark crude traded at a premium of $2.01 to August WTI.

US gasoline stockpiles probably decreased by 1.15 million barrels last week, according to the Bloomberg survey. Crude stockpiles at Cushing, Oklahoma, the delivery point for WTI and the nation’s biggest oil-storage hub, declined by 1.4 million barrels last week, according to a forecast compiled by Bloomberg.

Oil-market news:

Shale output from major US fields will expand to 5.48 million barrels a day in July, the EIA’s monthly Drilling Productivity Report shows.

Libyan production climbed to 820 000 barrels a day after the restart of the Sharara field, according to a person with direct knowledge of the matter, who asked not to be identified because they are not authorised to speak to the media.

Read Fin24's top stories trending on Twitter:

commodities  |  markets  |  oil
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