Futures slid 0.4 percent in New York after rising 5.7 percent in the previous five sessions. Inventories probably dropped by 1.5 million barrels last week, according to a Bloomberg survey before an Energy Information Administration report on Wednesday. Libya declared force majeure at a key export terminal as its biggest field stopped producing just a week after it reopened.
Oil has rallied above $50 a barrel after some members of the Organization of Petroleum Exporting Countries voiced support for an extension of production cuts past June, offsetting rising U.S. output. The curbs have stabilized the market, according to Russia, which is among 11 other nations outside the group that have joined in the pact aimed at easing a global glut.
“There is potential for some good upside to the oil price provided that OPEC maintains compliance with cuts,” said David Lennox, a resource analyst at Fat Prophets in Sydney. “Investors will continue to watch what happens with U.S. production, which has been trending higher. The market has become accustomed to fluctuating Libyan supply.”
West Texas Intermediate for May delivery was at $52.98 a barrel on the New York Mercantile Exchange, down 10 cents, at 8:07 a.m. in London. Total volume traded was about 14 percent below the 100-day average. The contract gained 84 cents to $53.08 on Monday, the highest close since March 7.
Brent for June settlement was 9 cents lower at $55.89 a barrel on the London-based ICE Futures Europe exchange. The contract rose 74 cents, or 1.3 percent, to $55.98 on Monday. The global benchmark crude was at a premium of $2.53 to June WTI.
U.S. crude inventories have climbed to 535.5 million barrels, the highest in weekly data compiled by the EIA since 1982. Stockpiles at Cushing, Oklahoma, the delivery point for WTI and the biggest U.S. oil-storage hub, probably rose by 800,000 barrels last week, according to a forecast compiled by Bloomberg.
- Libya’s National Oil Corp. declared force majeure on loadings of crude from the Zawiya oil terminal, citing a halt in production at the Sharara field, according to a copy of the NOC’s decree obtained by Bloomberg.
- Global stockpiles will continue to decline over the coming months as refiners process more crude after returning from maintenance, Kuwait’s Oil Minister Issam Almarzooq said, according to a report from the Kuwait News Agency.