Futures added as much as 0.8 percent in New York after rising 1.6 percent on Tuesday. U.S. crude stockpiles declined by 1.83 million barrels last week, the American Petroleum Institute was said to report, while government data Wednesday is forecast to show they dropped from a record. Output from the North Sea Buzzard field halted after an unplanned outage, according to a person familiar with the matter.
Oil has regained footing above $50 a barrel after some members of the Organization of Petroleum Exporting Countries voiced support for an extension to a six-month deal to cut production past June. Crude was also helped by a disruption in Libya’s biggest field, which has since resumed pumping. OPEC Secretary-General Mohammad Barkindo said Sunday that he is “cautiously optimistic that the market is already rebalancing,” even amid concern that ample U.S. supplies are undermining curbs by other producers.
“The likelihood that the OPEC-led production agreement will be extended for another six months is providing some support to oil,” said Ric Spooner, chief market analyst at CMC Markets in Sydney. “The extent of the recent rally makes the market vulnerable to bad news, especially poor inventory data.”
West Texas Intermediate for May delivery climbed as much as 41 cents to $51.44 a barrel on the New York Mercantile Exchange and was at $51.37 at 2:28 p.m. in Hong Kong. Total volume traded was about 27 percent below the 100-day average. Prices gained 79 cents to $51.03 on Tuesday, its highest close since March 7. Prices had dropped below $50 early last month for the first time since December.
Brent for June settlement rose as much as 40 cents, or 0.7 percent, to $54.57 a barrel on the London-based ICE Futures Europe exchange. Prices advanced $1.05, or 2 percent, to $54.17 on Tuesday. The global benchmark traded at a premium of $2.67 to WTI.
U.S. crude inventories probably dropped by 150,000 barrels to 533.8 million barrels in the week ended March 31, according to a Bloomberg survey before an Energy Information Administration report. Nationwide stockpiles have gained by about 55 million barrels since the start of this year.
- Permian drillers’ newfound ability to run multiple rigs in very close proximity has boosted the land’s value this year to between $175,000 and $220,000 an acre, according to Mike Kelly of Seaport Global Securities LLC and Bill Marko of Jefferies Group LLC.
- China became the biggest buyer of U.S. crude oil in February, surpassing Canada, at a time when OPEC is cutting back output.