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Oil halts slide near two-week low before US crude supply data
[MELBOURNE] Oil halted its decline after slipping to a two-week low before US government data forecast to show crude stockpiles expanded in the world's biggest consumer.
November futures, which expire Tuesday, rose as much as 0.9 per cent in New York after sliding 2.9 per cent Monday. Inventories probably climbed by 3.5 million barrels last week, according to a Bloomberg survey before an Energy Information Administration report Wednesday. Iran is preparing to boost output once world powers remove sanctions on its economy, regardless of any decisions by Opec, Oil Minister Bijan Namdar Zanganeh told reporters in Tehran.
Oil failed to sustain a gain above US$50 a barrel earlier this month amid signs the market will remain oversupplied. The Organisation of Petroleum Exporting Countries continues to pump more than its quota and Zanganeh sees no imminent change in Opec's output strategy.
"The picture remains unchanged for oil, we're still within the trading range for West Texas between US$43.50 and US$50," Michael McCarthy, a chief strategist at CMC Markets in Sydney, said by phone. "Unless we see a left-field event, a hurricane for example, it's very unlikely that we'll break that range any time soon."
West Texas Intermediate for November delivery advanced as much as 41 cents to US$46.30 a barrel on the New York Mercantile Exchange and was at US$46.06 at 1.42pm Sydney time. The contract fell US$1.37 to US$45.89 on Monday, the lowest close since Oct 2. The volume of all futures traded was about 47 per cent below the 100-day average. The more-active December future gained 13 cents to US$46.41.
Brent for December settlement was 11 cents higher at US$48.72 a barrel on the London-based ICE Futures Europe exchange. The contract slid US$1.85 to US$48.61 on Monday. The European benchmark crude traded at a premium of US$2.31 to WTI for December.
US crude stockpiles probably expanded for a fourth week through Oct 16, according to the Bloomberg survey. That would be the longest run of gains since April and keep supplies more than 100 million barrels above the five-year seasonal average, according to EIA data.
Iran is pushing to regain global oil sales it lost after the US and other world powers imposed sanctions over its nuclear programme. The country can boost exports by 500,000 barrels a day within a week of the removal of penalties, Roknoddin Javadi, managing director of state-run National Iranian Oil Co, told reporters. Shipments can be increased by 1 million barrels a day within six months of the curbs being lifted, he said.
The Islamic Republic is the fifth biggest Opec producer, according to data compiled by Bloomberg. The 12-member group has pumped above its 30-million-barrel-a-day quota for the past 16 months.