Futures slid 0.3 percent in New York. Prices on Tuesday pared gains to close up 1.7 percent after the American Petroleum Institute was said to report stockpiles of the motor fuel increased by 4.08 million barrels last week. Government data Wednesday is forecast to show supplies fell for a fifth week. Crude inventories shrank by 4.62 million barrels, the API reported.
Oil has struggled to stay above $50 a barrel amid speculation that rising U.S. output will counter supply curbs by the Organization of Petroleum Exporting Countries and its partners, including non-OPEC member Russia. American crude production will average more than 10 million barrels a day in 2018, breaking a record almost five decades old, according to the Energy Information Administration’s monthly Short-Term Energy Outlook report Tuesday.
“This is the high demand season in the U.S. and the market is expecting to see inventories decline,” said Michael McCarthy, a chief market strategist at CMC Markets in Sydney. “Momentum remains negative. The ongoing theme of increasing supply is outstripping the gain in demand.”
West Texas Intermediate for July delivery slid 14 cents to $48.05 a barrel on the New York Mercantile Exchange as of 7:52 a.m. in London. Total volume traded was about 6 percent below the 100-day average. Prices rose 79 cents to close at $48.19 Tuesday after declining 2 percent the previous two sessions.
Brent for August settlement was 14 cents lower at $49.98 a barrel on the London-based ICE Futures Europe exchange. Prices climbed 65 cents, or 1.3 percent, to $50.12 on Tuesday. The global benchmark crude traded at a premium of $1.78 to WTI.
U.S. gasoline stockpiles probably fell by 50,000 barrels last week, according to the median forecast in a Bloomberg survey before the EIA report. Nationwide crude inventories probably slid 3.25 million barrels for a ninth straight loss.
- The EIA increased its 2018 crude output forecast from the average 9.96 million barrels a day projected in May, according to the report.
- Royal Dutch Shell Plc lifted force majeure on Nigerian Forcados oil exports, according to a company spokesperson.
- The biggest Middle East oil and container ports banned all vessels sailing to and from Qatar from using their facilities amid a diplomatic crisis gripping the world’s main energy-exporting region.