Futures slid as much as 1 percent in New York after falling 0.1 percent on Tuesday. Stockpiles rose by 11.6 million barrels, the American Petroleum Institute was said to report. Government data Wednesday is forecast to show supplies climbed for a ninth week. Saudi Arabia sees crude inventories draining slower than expected and a decision to extend OPEC’s deal to cut output will be made when ministers gather in May, the kingdom’s energy minister said.
Oil has fluctuated above $50 a barrel since the Organization of Petroleum Exporting Countries and other nations started trimming supply on Jan. 1 to reduce a glut. Saudi Arabia and Russia, the architects of the deal, presented a united front on complying with the cuts at a conference Tuesday in Houston and, alongside officials from Iraq and Mexico, insisted the curbs are working.
“The weekly oil stocks data showed a whopping build in crude oil stocks,” said Michael Poulsen, an analyst at Global Risk Management Ltd. “Now all eyes will be on this afternoon’s weekly EIA oil inventory report.”
West Texas Intermediate for April delivery lost as much as 51 cents to $52.63 a barrel on the New York Mercantile Exchange and was at $52.73 at 9:35 a.m. in London. Total volume traded was about 21 percent below the 100-day average.
Brent for May settlement fell as much as 40 cents, or 0.7 percent, to $55.52 a barrel on the London-based ICE Futures Europe exchange. Prices slid 9 cents to $55.92 a barrel on Tuesday. The global benchmark crude traded at a premium of $2.39 to May WTI.
U.S. crude inventories probably rose by 2 million barrels last week, according to the median estimate in a Bloomberg survey before an Energy Information Administration report on Wednesday. Stockpiles have climbed to 520.2 million barrels, the highest level in weekly data compiled by the EIA since 1982.
- Oil prices will tumble to $40 a barrel if OPEC doesn’t extend its pact later this year to cut output, according to Scott Sheffield, chairman of shale producer Pioneer Natural Resources Co.
- U.S. crude production is projected to surge to a record 9.73 million barrels a day next year, according to the EIA’s monthly Short-Term Energy Outlook released Tuesday.
- China’s crude imports rose last month to 8.32 million barrels a day after the government granted import quotas allowing independent refiners to make overseas purchases.