Oil held losses near $55 a barrel as U.S. crude stockpiles unexpectedly rose and production extended its record run. Futures were little changed in New York after falling 2.5 percent the previous two sessions. Inventories expanded for a second week, while output climbed for a fourth time to 9.65 million barrels a day, the highest in more than three decades, according to the Energy Information Administration. Nine out of 11 analysts surveyed by Bloomberg had forecast a stockpile decline.
Oil has eased after reaching a two-year high last week on signs of tightening supplies and speculation the Organization of Petroleum Exporting Countries and its allies will extend output curbs past the end of March. Russia, one of its partners in the deal, is said to be unconvinced a decision to prolong the agreement is needed when OPEC meets in Vienna this month.
“It’s no surprise that U.S. production has edged higher given the higher oil prices,” said Barnabas Gan, an economist at Oversea-Chinese Banking Corp. in Singapore. “One reason why oil has rallied so much is because of speculation the supply deal could be extended to 2019. That’s a bullish view and could leave the market utterly disappointed when the decision is made.”
West Texas Intermediate for December delivery was at $55.39 a barrel on the New York Mercantile Exchange, up 6 cents as of 2:25 p.m. in Hong Kong. Total volume traded was about 27 percent below the 100-day average. Prices fell 37 cents to $55.33 on Wednesday.
Brent for January settlement rose 16 cents to $62.03 a barrel on the London-based ICE Futures Europe exchange. Prices declined 34 cents to $61.87 on Wednesday. The global benchmark was at a premium of $6.44 to January WTI.
U.S. crude stockpiles rose by 1.85 million barrels last week, according to the EIA report. The median estimate in a Bloomberg survey had forecast a 2.4 million barrel decline. Inventories at Cushing, Oklahoma, the delivery point for WTI and the biggest U.S. oil-storage hub, fell 1.5 million barrels.
- The OPEC-led cuts should be extended to help re-balance the market, according to Suhail Al Mazrouei, energy minister of the United Arab Emirates, the fourth biggest producer of the group.
Sources and Photo-credits: Bloomberg