Futures slid as much as 1.3 percent in New York, extending a 0.4 percent drop on Tuesday after the American Petroleum Institute was said to report that inventories rose last week. That may contrast with government data on Wednesday, which is forecast to show a decline. Iraq is committed to cut its share of output for an additional six months to achieve better prices, Prime Minister Haider Al-Abadi said at a news conference in Baghdad.
Oil is extending declines from a two-week high on concern that a surge in U.S. production may undercut OPEC’s strategy to stabilize the market and prop up prices. Russia and Saudi Arabia said on Monday that they’re in favor of extending an output-cut deal for nine months as global inventories aren’t yet at the level targeted by the Organization of Petroleum Exporting Countries and its allies. The group is scheduled to gather in Vienna on May 25.
“An unexpected increase in U.S. crude oil stocks in the last reporting week announced by the API has depressed prices,” said Carsten Fritsch, an analyst at Commerzbank AG in Frankfurt. “This was attributable to strong growth in imports.”
West Texas Intermediate for June delivery fell as much as 63 cents to $48.03 a barrel on the New York Mercantile Exchange, and was at $48.50 at 10:17 a.m. in London. Prices closed at $48.66 on Tuesday, falling from $48.85 on Monday, the highest close since April 28. Total volume traded was about 30 percent above the 100-day average.
Brent for July settlement dropped 8 cents, or 0.2 percent, to $51.57 a barrel on the London-based ICE Futures Europe exchange. The contract decreased 17 cents to settle at $51.65 a barrel on Tuesday. The global benchmark crude traded at a $2.72 premium to July WTI.
U.S. crude stockpiles gained by 882,000 barrels in the week ended May 12, the API was said to report on Tuesday. Inventories probably slid by 2.67 million barrels, falling for a sixth week, according to the median estimate in a Bloomberg survey of analysts. The nation’s drillers have been boosting output to the highest level since August 2015.
- Saudi Aramco plans to sign agreements with at least 10 companies including General Electric Co. and oil field-service businesses when President Donald Trump visits Saudi Arabia, according to two people familiar with the matter.
- Kuwait joined Saudi Arabia and Russia in supporting an extension of oil-output cuts by OPEC and other global producers through the first quarter of 2018.