Futures were little changed in New York, having recovered 6.3 percent since slumping to a five-month low on May 5. Stockpiles probably dropped by 2 million barrels last week, according to a Bloomberg survey before Energy Information Administration data Wednesday. In addition to the potential extension of the OPEC agreement into 2018, some ministers have also discussed the possibility of deepening their output cuts, said four delegates.
Oil capped a third weekly decline on Friday after dropping to levels last seen before the Organization of Petroleum Exporting Countries agreed in November to reduce output. While Goldman Sachs Group Inc. and Citigroup Inc. see the market tightening and say the recent selloff wasn’t based on fundamentals, concerns remain about the pace of rising U.S. supply.
“There is a general belief that OPEC will leave its quota system in place,” said Tamas Varga, an analyst at PVM Oil Associates Ltd. in London. “If that is the case then global inventories should fall about 1 million barrels a day in the second half of the year.”
West Texas Intermediate for June delivery was at $46.52 a barrel on the New York Mercantile Exchange, up 9 cents, at 9:34 a.m. in London. Total volume traded was about 18 percent above the 100-day average. The contract gained 21 cents to $46.43 on Monday, rising for a second day.
Brent for July settlement was 12 cents higher at $49.46 a barrel on the London-based ICE Futures Europe exchange. Prices climbed 24 cents to $49.34 on Monday. The global benchmark crude traded at a premium of $2.52 to July WTI.
U.S. crude stockpiles have declined for four weeks after reaching the highest level in more than three decades at the end of March. Inventories at Cushing, Oklahoma, the delivery point for WTI and the nation’s biggest oil-storage hub, probably increased by 60,000 barrels last week, according to a forecast compiled by Bloomberg.
- OPEC delegates with knowledge of the talks on deepening and extending cuts didn’t say that the discussions resulted in any kind of agreement.
- Libya is pumping the most oil since October 2014 as the OPEC member restores output while mending the nation’s political divisions.
- An oil tanker was signaling as its destination the Forcados export terminal in Nigeria, which has been under force majeure since February last year, according to ship-tracking data. Shell said there’s no update on when Forcados exports might resume.