Prices rose as much as 1 percent in London, paring Wednesday’s 3.6 percent loss. The first three months of supply curbs have failed to bring inventories below the five-year average, Saudi Arabia’s Energy Minister Khalid Al-Falih said. Oil slid on Wednesday by the most since March 8 as expanding U.S. output offset shrinking crude stockpiles, which fell for a second week after reaching a record.
“It seems that OPEC is going to need to curtail production for longer than they had originally envisaged in order to get rid of the supply overhang,” said Ric Spooner, a chief market analyst at CMC Markets in Sydney. “The gain in U.S. output and gasoline stockpiles coincided with a higher oil price after a good run and that meant the impact of the disappointing data was magnified.”
Oil has closed lower every day this week, after posting its third weekly gain Friday amid optimism the Organization of Petroleum Exporting Countries will extend supply curbs to ease a global glut. OPEC will make a decision on whether to prolong the deal at its official ministerial meeting in Vienna on May 25, Secretary-General Mohammad Barkindo said in Abu Dhabi.
Brent for June settlement climbed as much as 52 cents to $53.45 a barrel on the London-based ICE Futures Europe exchange and was at $53.37 at 8:22 a.m. in London. Prices slid $1.96, or 3.6 percent, to $52.93 on Wednesday. The global benchmark traded at a premium of $2.15 to June West Texas Intermediate.
WTI for May delivery, which expires Thursday, added as much as 42 cents, or 0.8 percent, to $50.86 a barrel on the New York Mercantile Exchange. Total volume traded was about 8.4 percent below the 100-day average. The contract lost $1.97 to $50.44 on Wednesday, the lowest close since April 3. The more active June futures gained 35 cents to $51.20.
U.S. crude production rose by 17,000 barrels a day to 9.25 million a day, the Energy Information Administration said in a report Wednesday. Output has climbed for nine weeks. Nationwide crude stockpiles dropped by 1.03 million barrels to 532.3 million. They were forecast to decrease by 1.4 million, according to a Bloomberg survey.
- Russia is likely to support prolonging the OPEC-led cuts with other nations, according to a Bloomberg survey.
- Iran will probably be allowed to keep its oil production unchanged if OPEC decides to extend the agreement, Kuwait Oil Minister Issam Almarzooq said.