August 9, 2017
Oil halted two days of declines as U.S. industry data showed crude stockpiles fell.
Futures added 0.3 percent in New York after dropping 0.8 percent the previous two sessions. U.S. inventories slid by 7.8 million barrels last week, the American Petroleum Institute was said to report Tuesday, while a Bloomberg survey also forecast a decline. The Energy Information Administration marginally boosted its estimates for American production in 2017 and 2018.
Prices have fluctuated around $49 a barrel this month as investors weigh rising global supply against output reductions from the Organization of Petroleum Exporting Countries and its allies. OPEC said Tuesday that Iraq, the United Arab Emirates and Kazakhstan, which have lagged behind in their pledged curbs, reaffirmed their commitment to cuts at a meeting in Abu Dhabi.
“The recovery this morning is most likely in anticipation of a sixth inventory decline in crude oil this afternoon” when the EIA releases its weekly stockpiles report, said Ole Sloth Hansen, head of commodity strategy at Saxo Bank A/S in Copenhagen. Gains will be capped by a stronger dollar, he said.
West Texas Intermediate for September delivery rose 15 cents to $49.32 a barrel on the New York Mercantile Exchange at 10:44 a.m. London time. Total volume traded was about 14 percent below the 100-day average. Prices lost 22 cents to $49.17 on Tuesday.
Brent for October settlement advanced 14 cents to $52.28 a barrel on the London-based ICE Futures Europe exchange, after sliding 23 cents on Tuesday. The global benchmark crude traded at a premium of $2.79 to October WTI.
U.S. crude output will average 9.35 million barrels a day this year, according to the EIA’s monthly Short-Term Energy Outlook released Tuesday. That’s up from a July projection of 9.33 million. Production will average 9.91 million barrels a day next year, up from 9.9 million forecast previously.
The EIA report Wednesday is forecast to show a decline in crude stockpiles of 2.2 million barrels, according to a Bloomberg survey. Iraq and the U.A.E. said at the Abu Dhabi meeting that OPEC’s estimates of their production — based on data from external sources — were at fault for any apparent failures to comply with output caps, according to two people familiar with the matter. Compliance from OPEC and its partners is likely to deteriorate over time as many countries need to produce as much as they can to boost revenue, CME Group Senior Economist Erik Norland said in a phone interview.