You are here
Oil extends advance toward US$46 on signs US stockpiles declined
[HONG KONG] Oil extended gains toward US$46 a barrel as US industry data showed crude and gasoline stockpiles declined, easing a glut.
Futures advanced as much as 2 per cent in New York after rising 1.8 per cent in the previous two sessions. Crude inventories fell by 8.13 million barrels last week, the American Petroleum Institute was said to report.
If the decline is replicated in government data Wednesday, it will be the biggest decrease since September. Gasoline supplies shrank by 801,000 barrels, the API said.
Oil remains in a bear market amid concern expanding global supply will offset curbs by the Organization of Petroleum Exporting Countries and its partners. The Energy Information Administration cut its estimate for 2018 US production to below 10 million barrels a day, the first time the government agency has lowered its forecast since it started making projections in January.
"The API data shows an aggressive decline in stockpiles and gives some confidence in demand," said Jonathan Barratt, chief investment officer at Ayers Alliance Securities in Sydney.
"The likelihood of prices heading toward US$50 to US$52 is higher after that set of inventory numbers."
West Texas Intermediate for August delivery added as much as 91 US cents to US$45.95 a barrel on the New York Mercantile Exchange, and was at US$45.83 at 7:45am in London. Total volume traded was about 9 per cent above the 100-day average. Prices increased 64 cents to US$45.04 on Tuesday.
Brent for September settlement climbed as much as 85 US cents, or 1.8 per cent, to US$48.37 a barrel on the London-based ICE Futures Europe exchange. Prices rose 64 US cents to US$47.52 on Tuesday. The global benchmark traded at a premium of US$2.23 to September WTI.
An EIA report Wednesday is forecast to show US crude stockpiles dropped by 2.45 million barrels, according to the median of 10 analyst estimates in a Bloomberg survey. Supplies remain more than 100 million barrels above the five-year average.