Futures were little changed in New York after losing 9.2 percent the previous six sessions. U.S. stockpiles probably increased by 3 million barrels for a 10th week of gains, according to a Bloomberg survey before data from the Energy Information Administration on Wednesday. OPEC is due to release its monthly report Tuesday that will show production figures for February, while Kuwait wants to extend the six-month OPEC-led deal to cut output beyond June.
Oil last week broke below $50 a barrel for the first time since December as rising U.S. supply has swamped the impact of supply reductions from members of the Organization of Petroleum Exporting Countries and 11 other nations that started Jan. 1. While OPEC Secretary-General Mohammad Barkindo said that February compliance to the deal will be higher than January, Russia’s Rosneft PJSC said higher U.S. output is the “main threat” to the agreement.
“The market will continue to watch for OPEC compliance as U.S. production surges,” said David Lennox, a resources analyst at Fat Prophets in Sydney. “The price is unlikely to collapse below $40. If U.S. output continues to climb, there is no way OPEC will extend the cuts into the second half to increase the price for American companies to get the advantage.”
West Texas Intermediate for April delivery was at $48.38 a barrel on the New York Mercantile Exchange, down 2 cents, at 2:02 p.m. in Hong Kong. Total volume traded was about 38 percent below the 100-day average. The contract fell 9 cents to $48.40 on Monday, the lowest close since Nov. 29.
Brent for May settlement was 2 cents higher at $51.37 a barrel on the London-based ICE Futures Europe exchange. The global benchmark traded at a premium of $2.43 to May WTI.
U.S. crude inventories have climbed to 528.4 million barrels, the highest level in weekly EIA data compiled since 1982. The nation is pumping 9.09 million barrels a day, the most in more than a year. The industry-funded American Petroleum Institute is scheduled to release its own weekly figures on Tuesday.
- Extending OPEC’s cuts will accelerate the rebalancing of the market and help prices to return to “acceptable” levels, Kuwait’s Oil Minister Issam Almarzooq said, according to the official news agency Kuna.
- OPEC producer Iraq will seek to boost output to 5 million barrels a day by the end of the year, Iraq Oil Report said, citing an interview with Oil Minister Jabbar Al-Luaibi.