Oil Steadies Ahead of Inventory Report
NEW YORK: Oil prices steadied on Tuesday, as the dollar relinquished early gains and expectations of OPEC output curbs lifted crude prices from session lows despite forecasts for data showing a second straight weekly build in US crude stockpiles.
US crude inventories likely rose by 2.4 million barrels in the week to Oct. 14, a Reuters poll of oil market analysts found. In the previous week to Oct 7, stocks grew by 4.9 million barrels.
The American Petroleum Institute (API), an industry group, was to issue its report on domestic oil stocks at 2030 GMT, after Tuesday’s market settlement. The US Energy Information Administration (EIA) will issue official numbers on Wednesday.
Brent crude was flat at $51.52 a barrel by 1616 GMT).
US West Texas Intermediate (WTI) crude rose 15 cents to $50.09.
The dollar was mixed in choppy trading. A strong dollar makes crude and other commodities denominated in the greenback less affordable to holders of other currencies.
Crude prices are up 13 percent from three weeks ago after the Organization of the Petroleum Exporting Countries proposed its first output cut or freeze in eight years to rein in a global crude glut. The group gathers on Nov. 30 for its policy meeting.
The oil rally has stalled at around $50 a barrel on doubts whether OPEC will reach a deal that satisfies all 14 members. Most in the OPEC need higher prices to repair economic damage after crude fell to almost $26 a barrel this year from 2014 highs above $100.
Some, like Iran, prefer not to cut output.
“Expectations are that we will get something” at the Nov. 30 meeting, Ian Taylor, CEO at Vitol, the world’s top oil trader, told an industry conference in London.
“Whether it is quite good enough to get a substantial rebalancing in the short term, I am not sure.”
Some are positive in their outlook for oil.
Analysts at Bernstein Energy said global oil inventories rose just 17 million barrels to 5.618 billion barrels in the third quarter, the smallest build since the fourth quarter of 2015.
Saudi crude exports in August fell to 7.305 million barrels per day from 7.622 million bpd in July, data showed on Tuesday.
Others said oil prices could not sustain the constant rise of recent weeks on OPEC pledges.
“We shorted WTI this morning at $51,” said Phil Davis, trader at PSW Investments in Woodland Park, New Jersey.
“We think ultimately that over the course of the next 30 days or so, it will drop down to $37.50 or possibly lower.”
(Source: ArabNews.com)