Oil prices steady as U.S. stockpiles drop again
LONDON (Bloomberg) -- Oil was steady before government data forecast to show U.S. crude stockpiles fell for a fifth week, further reducing an inventory surplus.
Futures were little changed in New York, having recovered 6.3% since slumping to a five-month low on May 5. Stockpiles probably dropped by 2 MMbbl last week, according to a Bloomberg survey before EIA data Wednesday. In addition to the potential extension of the OPEC agreement into 2018, some ministers have also discussed the possibility of deepening their output cuts, said four delegates.
Oil capped a third weekly decline on Friday after dropping to levels last seen before OPEC agreed in November to reduce output. While Goldman Sachs Group and Citigroup see the market tightening and say the recent selloff wasn’t based on fundamentals, concerns remain about the pace of rising U.S. supply.
“There is a general belief that OPEC will leave its quota system in place,” said Tamas Varga, an analyst at PVM Oil Associates in London. “If that is the case, then global inventories should fall about 1 MMbpd in the second half of the year.”
WTI for June delivery was at $46.39/bbl on the NYME, down $0.04, in London. Total volume traded was about 5% above the 100-day average. The contract gained $0.21 to $46.43 on Monday, rising for a second day.
Brent for July settlement was $0.05 lower at $49.29/bbl on the London exchange. Prices climbed $0.24 to $49.34 on Monday. Brent traded at a premium of $2.50 to July WTI. U.S. crude stockpiles have declined for four weeks after reaching the highest level in more than three decades at the end of March.
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OPEC delegates with knowledge of the talks on deepening and extending cuts didn’t say that the discussions resulted in any kind of agreement. Libya is pumping the most oil since October 2014 as the OPEC member restores output while mending the nation’s political divisions. An oil tanker signaled the Forcados terminal, the Nigeria grade that’s been under force majeure since February last year, according to ship-tracking data. Royal Dutch Shell said there’s no update on when Forcados exports might resume.
