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Oil resumes advance near US$43 before US crude stockpile data
[HONG KONG] Oil resumed its gain near US$43 a barrel before weekly US government crude inventory and production data.
Futures advanced as much as 1.2 per cent in New York after slipping 2.5 per cent Monday, the first decline in five days. US crude stockpiles probably expanded by 1.5 million barrels last week, according to a Bloomberg survey before an Energy Information Administration report Wednesday. Oil markets are signaling that prices have bottomed, even as growth in demand is forecast to slow this year, according to a senior executive at Vitol Group, an energy trader.
"Oil is looking more and more solid above the US$40 mark but it does seem momentum has slowed," Angus Nicholson, an analyst at IG Ltd in Melbourne, said by phone. "There are still concerns about the oversupply and the market rebalancing is certainly not happening just yet."
Crude has rebounded after slumping earlier this year to the lowest since 2003 amid signs the global surplus will ease as US output declines. Kuwait plans to boost production to more than 3 million barrels a day within months, doubling supply from where it stood during last week's oil-worker strike, according to Haitham Al-Ghais, market research manager at Kuwait Petroleum Corp.
West Texas Intermediate for June delivery climbed as much as 51 US cents to US$43.15 a barrel on the New York Mercantile Exchange and was at US$43.08 at 11.31 am Melbourne time.
The contract lost US$1.09 to US$42.64 on Monday after advancing 9.9 per cent the previous four sessions. Total volume traded was about 61 per cent below the 100-day average.
Brent for June settlement gained as much as 48 US cents, or 1.1 per cent, to US$44.96 a barrel on the London-based ICE Futures Europe exchange. The global benchmark crude traded at a premium of US$1.83 to WTI.
Crude stockpiles at Cushing, Oklahoma, the delivery point for WTI and the biggest US oil-storage hub, probably increased by 185,000 barrels last week, according to the median estimate in the Bloomberg survey. Nationwide inventories expanded to 538.6 million barrels in the week through April 15, the highest level since 1930, according to EIA data.
The government in eastern Libya exported its first cargo of crude Monday since the country with Africa's biggest known oil reserves split into rival power centers in the east and west.
Rig activity in Canada's oil fields has reached a record low, according to historical data provided by the Canadian Association of Oilwell Drilling Contractors, which dates back to 1984.