Oil halts slide as US crude stockpiles decline

Oil inventories drop by 9.2m barrels while output from Libya rebounds

Oil in New York has fluctuated this month in the narrowest range since August 2003. Photograph: iStock

Oil in New York has fluctuated this month in the narrowest range since August 2003. Photograph: iStock

 

Oil halted its slide near $48 (€41) a barrel as industry data showed US crude stockpiles declined again, further trimming an inventory surplus.

Futures rose 0.5 per cent in New York after slipping a second session on Tuesday. Inventories dropped by 9.2 million barrels last week, the American Petroleum Institute was said to have reported. If that is replicated in government data on Wednesday, it would be the largest drop in almost a year. Output from Libya is rebounding as its biggest field boosts production and a port reopens.

Oil in New York has fluctuated this month in the narrowest range since August 2003 as investors weigh rising global supply against output cuts by the Organisation of Petroleum Exporting Countries (Opec) and its allies. Opec won’t clear the global glut any time soon since any increase in price continues to bolster rival production from US shale, according to the International Energy Agency (IEA).

“The search for price cues will now turn to an upcoming update concerning U.S. oil stockpiles,” and “initial signs are encouraging” after the API data, said Stephen Brennock, an analyst at brokers PVM Oil Associates Ltd in London. “More bullish catalysts will be needed if the oil market is to extricate itself from no man’s land.”

West Texas Intermediate for September delivery was at $47.82 a barrel on the New York Mercantile Exchange, up 27 cents, at 9:46am in London. Total volume traded was about 9 per cent below the 100-day average. Prices lost 4 cents to $47.55 on Tuesday.

Brent for October settlement gained 36 cents, or 0.7 per cent, to $51.16 a barrel on the London-based ICE Futures Europe exchange. Prices climbed 7 cents to $50.80 on Tuesday. The global benchmark crude traded at a premium of $3.20 to October WTI.

US gasoline stockpiles rose by 301,000 barrels last week, the API reported, according to people familiar with the data. Crude inventories probably fell by 3.38 million barrels, according to the median estimate in a Bloomberg survey before an Energy Information Administration report Wednesday.

- Bloomberg