By Elizabeth Low and Grant Smith
Futures added 1.1% in New York. Expectations that the U.S. government will report that crude inventories increased last week eased after data from the American Petroleum Institute, an industry body, signaled that stockpiles fell by 541,000 barrels. Meanwhile, OPEC Secretary-General Mohammad Barkindo said there will likely be downward revisions to U.S. shale output going into 2020.
“Today, the market will focus on the release of official U.S. oil statistics by the Energy Information Administration,” said Harry Tchilinguirian, head of commodity markets strategy at BNP Paribas SA in London. “As usual, the mood ahead of the EIA release is being set by the preliminary numbers released by the API the day before.”
OPEC’s prediction comes after major American shale producers including Pioneer Natural Resources Co. warned that the shale boom is ending, although the EIA increased its production forecast for next year on Wednesday. The Organization of Petroleum Exporting Countries also said it sees a possible upswing in demand, especially if the U.S. and China reach a preliminary trade deal.
West Texas Intermediate for December delivery rose 58 cents, or 1%, to $57.70 a barrel on the New York Mercantile Exchange as of 10:32 a.m. in London. It settled 32 cents higher at $57.12 on Wednesday.
Brent for January rose 68 cents, or 1.1%, to $63.05 a barrel on the London-based ICE Futures Europe Exchange after advancing 0.5% on Wednesday. The global benchmark crude traded at a $5.22 premium to WTI for the same month.
The drop in crude inventories reported by the API compares with expectations in a Bloomberg survey ahead of the EIA data for an increase of 1.5 million barrels. The EIA report is due later on Thursday.
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