Futures slipped 0.5 percent after retreating 1.5 percent Monday. Crude supplies probably increased by 2.5 million barrels last week for a fifth weekly gain, according to a Bloomberg survey before a report Wednesday from the Energy Information Administration. BP Plc on Tuesday reported fourth-quarter earnings that missed analyst estimates after higher oil prices failed to fully compensate for lower income from refining.
Oil has fluctuated above $50 a barrel since a deal to trim output between the Organization of Petroleum Exporting Countries and 11 other nations took effect on Jan. 1. While OPEC members implement pledged cuts and Russia says its own reductions are ahead of schedule, U.S. production has edged higher as drillers boosted the rig count to the most since October 2015.
“U.S. production is starting to structurally rise again,” said Olivier Jakob, managing director at consultants Petromatrix GmbH in Zug, Switzerland. “The U.S. will see in the second quarter a significant increase in local supply compared to a year ago.”
West Texas Intermediate for March delivery was at $52.77 a barrel on the New York Mercantile Exchange, down 24 cents, at 9:37 a.m. in London. Total volume traded was about 16 percent below the 100-day average. The contract lost 82 cents to $53.01 on Monday. Prices averaged $52.61 last month.
Brent for April settlement was 30 cents lower at $55.42 a barrel on the London-based ICE Futures Europe exchange. The contract dropped $1.09, or 1.9 percent, to $55.72 on Monday. The global benchmark traded at a premium of $2.05 to April WTI.
Crude inventories at Cushing, Oklahoma, the delivery point for WTI and the biggest U.S. oil-storage hub, increased by 600,000 barrels last week, according to a forecast compiled by Bloomberg. Nationwide stockpiles are at 494.8 million barrels, the highest seasonal level in more than three decades, according to weekly data compiled by the EIA since 1982.
- BP’s profit adjusted for one-time items and inventory changes totaled $400 million, falling short of the $567.7 million average estimate of analysts.
- Iraq’s semi-independent Kurds paid international oil companies for the second time in as many weeks, settling dues for crude the producers sold in November and chipping away at a backlog of payments.
- Singapore is considering a range of measures to lure a listing from Saudi Arabian Oil Co., according to people familiar with the matter.