Oil Advances on Signs U.S. Stockpile Gains Easing After Harvey

Futures climbed as much as 1.3 percent in New York after declining 0.9 percent Tuesday. Inventories expanded by 1.44 million barrels last week, the American Petroleum Institute was said to report. That’s less than half the projected 3.9 million-barrel increase the government is forecast to report Wednesday. Some U.S. refiners are delaying maintenance to take advantage of strong margins.

While oil has rebounded the past two weeks, crude in the U.S. has struggled to hold above $50 a barrel as prices beyond that level make some shale profitable and boost supply. At the same time, the Organization of Petroleum Exporting Countries and its allies are said to be discussing extending by more than three months the output cuts that expire in March. Iraq, the group’s second-biggest producer, has said production should be reduced by an additional 1 percent to help rebalance the market.

“API yesterday sprung a bit of surprise when only showing a small build in crude stocks and a bigger-than-expected drop in fuel stocks,” said Ole Hansen, head of commodity strategy at Saxo Bank A/S. “WTI is seeing resistance at $50 because of increased hedging activity from U.S. producers above that level, which is viewed as a comfortable break-even price for many producers.”

West Texas Intermediate for October delivery, which expires Wednesday, rose as much as 62 cents to $50.10 a barrel on the New York Mercantile Exchange, after sliding 43 cents on Tuesday. Total volume traded was about 39 percent below the 100-day average. The more-active November futures climbed 60 cents to $50.50 at 12:07 p.m. London time.

Brent for November settlement advanced 66 cents, or 1.2 percent, to $55.80 a barrel on the London-based ICE Futures Europe exchange. Prices lost 34 cents to $55.14 on Tuesday. The global benchmark crude traded at a premium of $5.30 to November WTI.
more at:  https://www.bloomberg.com/news/articles/2017-09-19/oil-advances-on-signs-u-s-stockpile-gains-eased-after-Harvey

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Crude prices started the week on an upbeat note on Monday, boosted by expectations that oil producing countries will agree to extend an output cut at their meeting at the end of this month. Under the original terms of the deal, OPEC and 10 other non-OPEC countries led by Russia agreed to cut production by 1.8 million barrels a day (bpd) for six months. The agreement was extended in May of this year for a period of nine more months until March 2018 in a bid to reduce global oil inventories and support oil prices. Prices received another boost as a sizable weekly drop in active U.S. oil rigs to the lowest level since May fed expectations for a slowdown in domestic crude output growth. Click Read More below for additional information.
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