Futures in New York rose 0.5 percent after they slipped by the same amount on Monday. They alternated between gains and losses through four sessions last week as well, but the gyrations were limited to within $2 a barrel. U.S. stockpiles are forecast to have gained 1.37 million barrels last week. While the Organization of Petroleum Exporting Countries and other nations are cutting output, concern is growing they need more time to trim global inventories.
If industry data due Tuesday and government data on Wednesday show U.S. stockpiles are continuing to rise, it would be further evidence that the effect of output curbs by other producers is being blunted by rising American supply and drilling activity. Five OPEC countries joined with non-member Oman to voice support for prolonging their cuts past June. The market may rebalance later this year, BP Plc Deputy Chief Executive Officer Lamar McKay said.
“The market remains pretty nervous and the source of that is rising inventory and output,” said Ric Spooner, chief market analyst at CMC Markets in Sydney. “The cuts by OPEC, Russia and others have not produced the kind of reductions in supply that had been anticipated by this stage.”
West Texas Intermediate for May delivery was at $47.97 a barrel on the New York Mercantile Exchange, up 24 cents, at 11:41 a.m. in Hong Kong. Total volume traded was about 55 percent below the 100-day average. Prices declined 24 cents to $47.73 on Monday.
Brent for May settlement was 20 cents higher at $50.95 a barrel on the London-based ICE Futures Europe exchange. Prices fell 5 cents to $50.75 on Monday after declining 1.9 percent last week. The global benchmark was at a premium of $2.98 to WTI.
U.S. crude inventories rose to 533.1 million barrels through the week ended March 17, according to the Energy Information Administration. Stockpiles are at the highest level in weekly data compiled by the agency since 1982. The industry-funded American Petroleum Institute is due to released separate supply data on Tuesday.
- U.S. oil output will near the highest level since 1970 by December, according to a report from Barclays Plc.
- The five-nation joint technical committee that is assessing compliance to the OPEC-led supply cuts will meet again on April 21, according to an OPEC delegate.