By Saket Sundria and Grant Smith
Futures held above $55 a barrel in New York after slumping 3.2% on Tuesday, the most since the end of September. Industry data showed crude stockpiles rose by 5.95 million barrels last week, about four times the increase analysts expect the government will report Wednesday. The U.S. Senate passed legislation supporting Hong Kong protesters, potentially complicating trade talks with Beijing.
Oil has dropped about 16% from an April peak as the trade war saps demand amid a surge in global supply. Despite a looming glut in 2020, Saudi Arabia and Russia aren’t aiming to announce deeper production cuts when the Organization of Petroleum Exporting Countries and its partners meet in Vienna early next month.
“The optimism among market participants about an imminent partial trade agreement being reached between the U.S. and China has proven to be premature,” said Carsten Fritsch, an analyst at Commerzbank AG in Frankfurt. “OPEC+ is likely to find it hard to agree on more pronounced production cuts. And without bigger cuts, early 2020 risks seeing a sizeable oversupply.”
West Texas Intermediate for December delivery, which expires Wednesday, rose 42 cents to $55.63 a barrel on the New York Mercantile Exchange as of 8:40 a.m. local time. Futures lost $1.84 to settle at $55.21 on Tuesday, the lowest since Oct. 31. The more-active January contract increased 43 cents to $55.78.
Brent for January settlement gained 49 cents to $61.40 a barrel on the London-based ICE Futures Europe Exchange, after falling $1.53 on Tuesday. The global benchmark crude traded at a $5.61 premium to WTI for the same month.
The Energy Information Administration will probably report that crude inventories increased by 1.5 million barrels last week, the fourth straight advance, according to a Bloomberg survey. America’s shale output is expected to show a yearly growth of 800,000 barrels to 1 million barrels a day over the medium term, according to Citigroup Inc.
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