By Heesu Lee and Alex Longley
West Texas Intermediate futures pared some losses after dropping 0.8% earlier. The American Petroleum Institute reported that crude inventories at Cushing, Oklahoma, rose by 1.22 million barrels last week, according to people familiar with the data. Meanwhile, Nigeria suggested Saudi Arabia is ready to cut output further, and the kingdom also extended an invitation to Brazil to join the Organization of Petroleum Exporting Countries.
A deteriorating global economy weakened by the trade war has driven a 16% slump in crude since late April. That’s put the onus on OPEC and its allies to extend output cuts, though there are questions over Russia’s willingness. The Saudis may need to consider deeper curbs with other Gulf countries if Russia abstains, Citigroup Inc. said.
“WTI has come under some renewed pressure this morning,” ING Bank analysts Warren Patterson and Wenyu Yao wrote in a report. “This follows the API reporting that U.S. crude-oil inventories in Cushing increased. Stocks at the WTI delivery hub have been trending higher since late September, which has put pressure on the prompt WTI time spreads.”
WTI for December delivery slipped 11 cents to $55.43 a barrel on the New York Mercantile Exchange as of 9:09 a.m. local time. The U.S. benchmark was trading in a bearish contango structure, which indicates oversupply.
Brent for December gained 4 cents to $61.63 a barrel on the London-based ICE Futures Europe Exchange. The global benchmark crude traded at a premium of $6.20 to WTI.
The API report is in line with data released by Genscape Inc. earlier in the week, which showed inventories at Cushing rose by 1.5 million barrels. If confirmed by government figures later Wednesday, that would be a fourth straight week of gains at the storage hub. Meanwhile, nationwide stockpiles fell by 708,000 barrels last week, according to the API.
The OPEC+ alliance is due to meet in December to discuss whether to extend or deepen production cuts that expire in March. Brazil’s President Jair Bolsonaro said the country received an informal request to join OPEC, following a conversation with Saudi Crown Prince Mohammed Bin Salman, and that he would like to join.
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