[LONDON] Oil traded above US$48 a barrel, heading for the first gain in a week before US government data forecast to show crude stockpiles declined, easing a glut.
Futures rose as much as 0.8 per cent in New York, recouping an earlier decline of as much as 0.9 per cent. US crude stockpiles, which are near an eight-decade high, slid by 2 million barrels last week, according to a Bloomberg survey before Energy Information Administration data Wednesday.
US oil futures have surged more than 80 per cent from a 12-year low earlier this year on signs the global glut will ease amid declining production in Nigeria and non-Opec countries including in the US. The Organization of Petroleum Exporting Countries is unlikely to set an output target when it meets June 2 as it sticks with Saudi Arabia's strategy to squeeze out rivals, according to all but one of 27 analysts surveyed by Bloomberg.
"The uptrend since January has not been broken in any way," said Michael Poulsen, an analyst at Global Risk Management Ltd. While there have been some corrections, the advance in prices has been strengthened by expectations of falling US stockpiles, he said.
West Texas Intermediate for July delivery rose as much as 37 cents to US$48.45 a barrel on the New York Mercantile Exchange and was at US$48.35 as of 1:44 pm London time. The total volume traded was about 41 per cent below the 100-day average.
Brent for July settlement gained as much as 0.5 per cent to US$48.61 on the London-based ICE Futures Europe exchange. The contract fell 0.8 per cent to US$48.35 on Monday. The global benchmark crude traded at a premium of 16 cents to WTI.
Crude inventories at Cushing, Oklahoma, the delivery point for WTI and the biggest US oil-storage hub, probably decreased by 400,000 barrels last week, according to the Bloomberg survey. Nationwide stockpiles rose to 541.3 million barrels through May 13, near the highest level since October 1929.
Royal Dutch Shell Plc is in a position to restart Canadian output that was affected by wildfires, chief executive officer Ben Van Beurden said. Workers are being allowedto prepare to re-enter other sites after cool weather helped contain the inferno.