Oil halted three days of gains near $51 a barrel as investors wait to see if rising U.S. crude inventories signaled in industry data will also be shown by government figures.
Futures lost 0.6 percent in New York after climbing 4.1 percent in the previous three sessions. Inventories rose by 3.1 million barrels last week, the American Petroleum Institute was said to report. Energy Information Administration data Thursday is forecast to show stockpiles dropped for a third week. Global supply and demand estimates for 2018 indicate that stockpiles may not fall further, potentially capping prices, according to the International Energy Agency.
Oil is up this week after the biggest weekly loss since May amid speculation output curbs led by members of the Organization of Petroleum Exporting Countries are gradually offsetting rising global production. Crude supply continues to exceed demand and markets are not re-balancing yet, according to International Energy Agency Executive Director Fatih Birol.
“The crucial read will be the EIA data and the daily production number out of the U.S.,” said Michael McCarthy, a chief strategist at CMC Markets in Sydney. “That’s the swing factor in the market at the moment. Barring an unforeseen event, an armed conflict or the return of hurricanes to important production areas, I don’t see oil breaking out of this range for some time to come.”
West Texas Intermediate for November delivery was at $50.99 a barrel on the New York Mercantile Exchange, down 31 cents, at 9:02 a.m. in London. Total volume traded was about 48 percent below the 100-day average. Prices gained 38 cents to $51.30 on Wednesday, the highest in more than a week.
Brent for December settlement declined 26 cents to $56.68 a barrel on the London-based ICE Futures Europe exchange. Prices added 33 cents, or 0.6 percent, to $56.94 on Wednesday. The global benchmark crude traded at a premium of $5.40 to December WTI.
Global oil stockpiles will fall this year by 300,000 barrels a day as stronger demand and output curbs by OPEC and Russia whittle away a surplus, the IEA said Thursday in its monthly report. Still, even if the producers decide to continue with the cuts next year, surging supplies from the U.S. and elsewhere will prevent inventories dropping further.
- U.S. government data may show nationwide crude inventories declined by 2.4 million barrels, according to the median estimate in a Bloomberg survey before the EIA report.
- OPEC will need to supply 33.1 million barrels a day next year, about 350,000 a day more than it pumped last month, the group said in its monthly report on Wednesday.
- U.S output will average 9.92 million barrels a day next year, the EIA said in its monthly Short-Term Energy Outlook on Wednesday. That’s up from a September estimate of 9.84 million barrels.