Futures were little changed, having fallen to a three-week low on April 24. The industry-funded American Petroleum Institute was said to report U.S. crude supplies increased by 897,000 barrels last week. Meanwhile, a Bloomberg survey forecasts stockpiles probably fell by 1.75 million barrels before an Energy Information Administration report Wednesday.
Oil’s rally faltered last week amid concern rising U.S. output will offset efforts by the Organization of Petroleum Exporting Countries and its allies to trim a global glut. While OPEC members mull an extension of the six-month deal past June, American drillers targeting crude continue to add rigs to shale fields.
The “latest API report on U.S. petroleum stocks was filled with bearish surprises galore,” said Stephen Brennock, an analyst at PVM Oil Associates Ltd. in London. The market faces a “setback to the global oil rebalancing process” if EIA data also shows an increase.
West Texas Intermediate for June delivery was at $49.49 a barrel on the New York Mercantile Exchange, down 7 cents, at 9:30 a.m. in London, paring an earlier drop of as much as 37 cents. Total volume traded was about 34 percent below the 100-day average. Prices climbed 33 cents to $49.56 on Tuesday after losing 7.4 percent the previous six days.
Brent for June settlement was 8 cents lower at $52.02 a barrel on the London-based ICE Futures Europe exchange after slipping as much as 0.8 percent earlier. Prices gained 50 cents to $52.10 on Tuesday. The global benchmark crude traded at a premium of $2.54 to WTI.
U.S. government data Wednesday is forecast to show stockpiles slid for a third week. Inventories rose to 535.5 million barrels at the end of March, the highest level in weekly data compiled by the EIA since 1982.
- Oil prices will advance to new highs over the coming months, hedge fund trader Pierre Andurand reiterated in a letter to investors obtained by Bloomberg News.
- Petroleos Mexicanos has launched its own oil-hedging program to safeguard against a potential price drop and assure financial security for the world’s eleventh largest crude producer.
- Big Oil’s struggle against crude’s collapse is starting to ease, giving some companies enough cash to pay shareholders without piling on more debt as first-quarter earnings approach.