Oil extended gains above $54 a barrel in the longest winning streak in three months as U.S. industry data showed both crude and gasoline inventories declined last week. Futures added as much as 1.1 percent in New York after rising 4.2 percent in the four sessions through Tuesday. Crude stockpiles dropped by 5.09 million barrels, while gasoline supplies fell by 7.7 million last week, the American Petroleum Institute was said to report. U.S. oil inventories probably decreased a fifth time in six weeks, according to a Bloomberg survey before government data Wednesday.
Global benchmark Brent crude topped $60 a barrel last month for the first time since July 2015, while West Texas Intermediate, the U.S. marker, is set for the highest close in two years as Saudi Arabia and Russia signaled support for extending supply cuts well into 2018. The market was also buoyed by conflict between the Iraqi central government and Kurdish forces that threatened crude production from northern fields in the OPEC nation.
“The pace is slow but the oil market’s heading toward rebalancing,” Seo Taejong, a Seoul-based analyst at Korea Investment & Securities Co., said by phone. “Surging U.S. crude exports are currently dragging the nation’s stockpiles, but this can be a double-edged sword because while falling inventories are good for prices, it can also mean U.S. production can be boosted.”
WTI crude for December delivery traded at $54.93 on the New York Mercantile Exchange at 3:59 p.m. in Singapore, up 55 cents. If the current session ends at that level, it would be the highest close for front-month prices since July 2015. Total volume traded was about 43 percent below the 100-day average. Prices climbed 5.2 percent last month.
Brent for January settlement rose 35 cents, or 0.6 percent, to $61.29 a barrel on the London-based ICE Futures Europe exchange. The December contract expired Tuesday, up 47 cents, or 0.8 percent, at $61.37. The benchmark traded at a premium of $6.18 to January WTI.
An Energy Information Administration report Wednesday is forecast to show U.S. crude inventories fell by 1.3 million barrels last week, according to the median estimate in a Bloomberg survey of analysts. Gasoline stockpiles probably dropped by 1.55 million barrels. Daily exports of American crude climbed for the sixth time in seven weeks to 1.92 million barrels in the week ended Oct. 20, according to EIA data.
- Saudi Arabia will need oil to trade at $70 a barrel next year to break even, the Washington-based International Monetary Fund said Tuesday in its Regional Economic Outlook for the Middle East and Central Asia.
- Goldman Sachs Group Inc. has hired a slate of traders from rivals to turn around commodities business after it suffered the worst quarterly performance in the firm’s history as a public company.