Futures rose as much as 0.8 percent in New York after falling 1.2 percent on Tuesday. Inventories dropped by 5.79 million barrels last week, the American Petroleum Institute was said to report. Government data Wednesday is forecast to show stockpiles slid for a fifth week. The Energy Information Administration boosted its estimate for average U.S. output this year to 9.31 million barrels a day, up from 9.22 million a day projected in April.
Oil is edging higher after last week dropping to its lowest levels since the Organization of Petroleum Exporting Countries agreed in November to reduce output. While Saudi Arabia and non-OPEC nation Russia signal they could extend cuts into 2018, concerns remain about the pace of rising U.S. supply, which the EIA sees climbing to a record next year.
“While the API data is supportive, rising U.S. production will maintain pressure on prices,” said Jonathan Barratt, chief investment officer at Ayers Alliance Securities in Sydney. “Global oil consumption needs to pick up and that will placate a lot of market concerns.”
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West Texas Intermediate for June delivery climbed as much as 38 cents to $46.26 a barrel on the New York Mercantile Exchange, and traded at $46.13 at 7:50 a.m. in London. Total volume traded was about 26 percent below the 100-day average. The contract lost 55 cents to $45.88 on Tuesday.
Brent for July settlement was 20 cents higher at $48.93 a barrel on the London-based ICE Futures Europe exchange. Prices slid 61 cents, or 1.2 percent, to $48.73 on Tuesday. The global benchmark crude traded at a premium of $2.43 to July WTI.
U.S. crude stockpiles probably fell by 2 million barrels last week, according to a Bloomberg survey before an EIA report Wednesday. Nationwide inventories have been declining after climbing to the highest level in more than three decades at the end of March.
- U.S. crude output will climb to a record 9.96 million barrels a day in 2018, up from 9.9 million barrels projected last month, according to the EIA’s monthly Short-Term Energy Outlook released Tuesday.
- Global oil stockpiles are building slower than expected on a seasonal basis, Goldman Sachs Group Inc. analysts including Jeffrey Currie wrote in a May 9 note.