January 23, 2018, by Alex Longley
Oil headed toward $64 a barrel in New York before U.S. inventory data that may show a record run of declines.
March futures advanced 0.4 percent as a survey showed stockpiles probably shrank for a 10th week, which would mark the longest run of declines in weekly data since 1982. Inventory figures will be released by the government Wednesday, with a steer due from the American Petroleum Institute Tuesday.
Oil is extending a two-year advance after OPEC and its allies including Russia reiterated their commitment to curb supply to drain a global glut. While Goldman Sachs Group Inc. and the International Energy Agency warn of a looming surge in U.S. shale output, that producer deal and a “supportive” economic outlook from the International Monetary Fund could underpin further price gains, said Tamas Varga, an analyst at PVM Oil Associates Ltd. in London.
“If we break $70 on Brent then we’re probably going to go higher,” he said. “We are waiting for the inventory data.”
West Texas Intermediate for March rose as much as 49 cents to $64.06 a barrel on the New York Mercantile Exchange, and was at $63.85 as of 12:22 p.m. London time. Total volume traded was about 17 percent below the 100-day average. The February contract expired Monday after adding 12 cents.
Brent for March settlement climbed 29 cents to $69.32 a barrel on the London-based ICE Futures Europe exchange after gaining 0.6 percent on Monday. The global benchmark crude traded at a premium of $5.50 to WTI.
U.S. crude inventories probably dropped by 2.25 million barrels last week, according to a Bloomberg survey. Stockpiles fell to 412.7 million barrels in the week ended Jan. 12, the lowest since February 2015, data from the Energy Information Administration showed last week. Oil production rebounded to 9.75 million barrels a day, near a record.
The IEA sees a possible upward revision to its U.S. production outlook and a potential downward shift in its Venezuelan supply forecast, Executive Director Fatih Birol said in an interview in Davos. Barclays Plc said U.S. shale drillers are likely to avoid the temptation of high prices and maintain restraint on capital spending this year. The bank also raised its 2018 price forecast by $5 a barrel to $60. Repsol CEO Josu Jon Imaz sees “robust” growth in oil demand as the global economy expands