Futures slipped 0.2 percent. Libyan production dropped after clashes forced two of the country’s biggest oil ports to shut down, threatening the OPEC member’s efforts to revive production. In the U.S., producers added more rigs last week, extending a drilling surge into a 10th month, Baker Hughes Inc. said. Prices reached the day’s high after Iraq’s oil minister said OPEC will probably have to extend its output curbs for more than six months.
Oil has fluctuated as investors assess whether U.S. output and inventory gains will hurt efforts by the Organization of Petroleum Exporting Countries and other nations to ease a glut. American production has risen to the highest in almost a year, while Saudi oil supply fell by 90,000 barrels a day in February from a month earlier.
“If we don’t start to get big inventory draws soon this market is in big trouble,” Bill O’Grady, chief market strategist at Confluence Investment Management in St. Louis, which oversees $6.1 billion, said by telephone. “This will only work if the Saudis continue to make cuts to justify prices.”
West Texas Intermediate for April delivery slipped 13 cents to settle at $53.20 a barrel on the New York Mercantile Exchange. Volume traded was about 14 percent below the 100-day average. Futures are up 48 percent from a year ago.
Brent for May settlement rose 11 cents to $56.01 a barrel on the London-based ICE Futures Europe exchange. The global benchmark closed at a $2.30 premium to May WTI.
Hedge funds trimmed their net-long positions on WTI, or the difference between bets on a price increase and wagers on a decline, by 6.5 percent in the week ended Feb. 28, U.S. Commodity Futures Trading Commission data show. Speculators’ wagers on Brent crude dropped by 38,420 contracts to 469,189, data from ICE Futures Europe showed.
In Libya, the Benghazi Defense Brigades militia seized the Es Sider terminal Friday, people with knowledge of the matter said.
Oil demand is set to overtake supply, according to a March 5 Goldman Sachs Group Inc. report. This viewpoint was echoed by Eldar Saetre, chief executive officer at Statoil ASA, when he visited Bloomberg’s Houston office Monday.
“We are very close,” Saetre said. “We are getting to a more balanced market, and there will be a more rebalancing process of storage during the second half.”
Saetre is among the energy ministers, corporate heads and analysts gathered in Houston this week for the CERAWeek indudstry conference.
“I’m keeping my eyes on CERA this week,” Bob Yawger, director of the futures division at Mizuho Securities USA Inc. in New York, said by telephone. “We could get market movements at any time because of a comment. They want to keep the speculators from exiting the market at least until May, and a leaked statement is the easiest way to do that.”
- Oil companies are reviving investment after a two-year rout as OPEC output cuts boost prices, easing but not eliminating the risk of a future supply crunch, the International Energy Agency said.
- Rigs targeting crude in the U.S. rose by seven to 609 last week, according to data Friday from Baker Hughes. That’s the most since October 2015. Companies have put 84 rigs back to work this year.
- U.S. crude supplies probably rose 788,000 barrels last week, according to a Bloomberg survey before an Energy Information Administration report Wednesday.
- A majority of oil sector workers in Gabon agreed to go ahead with a general strike, the ONEP union said in a statement March 5.