Futures were little changed in New York after dropping 7.4 percent over the previous six sessions. Stockpiles probably slid by 1.95 million barrels last week, according to a Bloomberg survey before a report from the Energy Information Administration on Wednesday. Russian Energy Minister Alexander Novak will meet with the nation’s oil bosses this week to discuss extending an accord by global producers to cut output.
Oil’s rally faltered last week amid concern that rising U.S. output will offset efforts by the Organization of Petroleum Exporting Countries and its allies to trim a global glut. While OPEC members mull an extension to the six-month deal past June, American drillers targeting crude continue to add rigs to shale fields.
“Following the marked fall in recent days, it is probable that prices will stabilize,” said Eugen Weinberg, an analyst at Commerzbank AG in Frankfurt. Still, “investors feel that the oversupply and surplus stocks are not being removed from the oil market quickly enough.”
West Texas Intermediate for June delivery was at $49.24 a barrel, up 1 cent, on the New York Mercantile Exchange at 9:01 a.m. London time. Total volume traded was about 29 percent below the 100-day average. The contract lost 39 cents, or 0.8 percent, to $49.23 on Monday, the lowest close since March 28.
Brent for June settlement was unchanged at $51.60 a barrel on the London-based ICE Futures Europe exchange, after dropping 0.7 percent on Monday. The global benchmark crude traded at a premium of $2.36 to WTI.
U.S. crude stockpiles have fallen for two straight weeks after rising to 535.5 million barrels at the end of March, the highest level in weekly data compiled by the EIA since 1982. Inventories at Cushing, Oklahoma, the delivery point for WTI and the nation’s biggest oil storage hub, probably dropped by 700,000 barrels last week, according to the forecast compiled by Bloomberg.
- Novak will hold talks with Russian oil companies this week before meeting with OPEC and non-OPEC counterparts in Vienna on May 25. The minister said April 21 that the issue of whether to prolong the oil-cuts deal was under discussion in Russia.
- The OPEC-led cuts need to be extended through the first half of next year in order to reduce inventories below the five-year average, according to Fereidun Fesharaki, the head of industry consultant FGE.