Oil extended its advance to near $50 a barrel as weekly US industry data showed crude stockpiles declined, easing a glut.
Futures rose as much as 1.5 per cent in New York after climbing 1.1 per cent Tuesday. Inventories dropped by 5.14 million barrels last week, the American Petroleum Institute was said to report. Data from the Energy Information Administration Wednesday is forecast to show supplies fell. Canadian oil-sands producers that cut more than 1 million barrels a day from the market because of the threat of wildfires are starting the process of resuming operations.
Oil has surged more than 85 per cent from a 12-year low earlier this year on signs the global glut will ease amid declining supply in Nigeria and non-Opec countries including the US. Opec is unlikely to set an output target when it meets on June 2 as it sticks with Saudi Arabia’s strategy of squeezing out rivals, according to all but one of 27 analysts surveyed by Bloomberg.
“The API crude inventory number is very bullish,” Angus Nicholson, an analyst at IG in Melbourne, said by phone. “If we see a similar figure in the EIA data that will push prices above $50. The big question is whether this pullback in stockpiles is because of the disruptions from the Canadian wildfires, or does it have more to do with the seasonal pickup.”
West Texas Intermediate for July delivery rose as much as 73 cents to $49.35 a barrel on the New York Mercantile Exchange and was at $49.22 at 10.23am Hong Kong time. The contract gained 54 cents to $48.62 on Tuesday. Total volume traded was about 40 per cent below the 100-day average.
Brent for July settlement increased as much as 65 cents, or 1.3 per cent, to $49.26 a barrel on the London-based ICE Futures Europe exchange. The contract rose 26 cents to $48.61 on Tuesday. The global benchmark crude was at a discount of 7 cents to WTI.
Crude stockpiles at Cushing, Oklahoma, the delivery point for WTI and the biggest US oil-storage hub, declined by 189,000 barrels last week, the API said Tuesday, according to people familiar with the numbers. Nationwide inventories probably dropped by 2 million barrels through May 20, according to the median estimate in a Bloomberg survey before the EIA report.
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