Oil trades near $57 as US crude stockpiles seen extending drop

Hong Kong - Oil traded near $57 a barrel before US data forecast to show crude stockpiles in the world’s biggest consumer fell for a fifth week.

Futures were little changed in New York after slipping 0.2% on Monday. Inventories probably lost 3 million barrels last week, according to a Bloomberg survey before Energy Information Administration data on Wednesday.

Nigerian oil workers suspended strike action and agreed to continue talks next month, a union spokesperson said, while output from a Libyan field returned to normal after a power outage on Saturday, said a person familiar with the matter.

Oil has rallied the past three months as the Organisation of Petroleum Exporting Countries and its allies reduce supply to drain a global glut. The unprecedented cooperation among producers has pushed prices this year to average almost $51 a barrel, on their way to a second annual advance.

“Rebalancing is moving in the right direction,” said Ric Spooner, a Sydney-based analyst at CMC Markets. “The higher the price, the greater the incentive for new supply and that really is the dynamic to be watching. Everybody will also be watching Middle East politics, which is progressively deteriorating.”

West Texas Intermediate for January delivery, which expires on Tuesday, added as much as 19 cents to $57.35 a barrel on the New York Mercantile Exchange. Total volume traded was about 54% below the 100-day average. The more-active February futures rose 16c to $57.38 at 2:32 pm in Hong Kong.

Brent for February settlement climbed 14c to $63.55 a barrel on the London-based ICE Futures Europe exchange after rising 0.3% on Monday. The global benchmark traded at a premium of $6.16 to February WTI.

US crude stockpiles at Cushing, Oklahoma, the delivery point for WTI and the nation’s biggest oil-storage hub, probably fell by 2.2 million barrels last week, according to a forecast compiled by Bloomberg. That would be a sixth weekly drop, the longest run since July, according to EIA data.

Oil-market news:

• Shale output at major US fields is projected to reach 6.41 million barrels a day next month, according to the EIA’s monthly Drilling Productivity Report.

• The EIA boosted its December estimate to 6.31 million a day.

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