Oil rose on signs the pace of U.S. stockpile gains is slowing as refiners resume operations after Hurricane Harvey, boosting crude demand.
Futures climbed as much as 0.8 percent in New York after declining 0.9 percent Tuesday. Inventories expanded by 1.44 million barrels last week, the American Petroleum Institute was said to report. That’s less than half the projected 3.9-million-barrel increase the government is forecast to report Wednesday. Some U.S. refiners are delaying maintenance to take advantage of strong margins.
While oil has rebounded the past two weeks, prices have struggled to hold above $50 a barrel this year as rising U.S. output stifles supply curbs led by members of the Organization of Petroleum Exporting Countries. Production should be cut by an additional 1 percent to help rebalance the market, according to Iraq, the second-biggest OPEC producer.
“The disruptions in the Gulf appear to be diminishing after Harvey,” said David Lennox, an analyst at Fat Prophets in Sydney. “Oil prices are unable to make a sustainable break above $50 a barrel and that’s because the marginal cost of U.S. domestic production is probably not far off that level.”
West Texas Intermediate for October delivery, which expires Wednesday, rose as much as 41 cents to $49.89 a barrel on the New York Mercantile Exchange. Total volume traded was about 47 percent below the 100-day average. Prices slid 43 cents to $49.48 on Tuesday. The more-active November futures added 39 cents to $50.29 at 7:48 a.m. in London.
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Brent for November settlement climbed 23 cents, or 0.4 percent, to $55.37 a barrel on the London-based ICE Futures Europe exchange. Prices lost 34 cents, or 0.6 percent, to $55.14 on Tuesday. The global benchmark crude traded at a premium of $5.08 to November WTI.
U.S. gasoline stockpiles fell by 5.06 million barrels last week, the API said Tuesday, according to people familiar with the data. Crude inventories at Cushing, Oklahoma, the delivery point for WTI and the nation’s biggest oil-storage hub, increased by 422,000 barrels.
- Some producers favor extending the OPEC-led supply cuts until the end of 2018, Iraqi Oil Minister Jabbar al-Luaibi said Tuesday, adding there is no firm decision yet on prolonging curbs.
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