London: Oil traded near $52 a barrel before government data forecast to show US crude stockpiles fell for a fifth week, trimming an inventory glut.
Futures gained as much as 0.7 percent in New York after rising 2.4 percent over the previous two sessions. Stockpiles probably dropped by 2.5 million barrels last week, according to a Bloomberg survey before an Energy Information Administration report yesterday. Output cuts agreed by Opec nations and other producers may reduce swollen inventories as early as the first quarter, according to Citigroup Inc.
Oil has traded near $50 a barrel since the Organization of Petroleum Exporting Countries (Opec) agreed November 30 to cut output for the first time in eight years. Non- Opec producers including Russia will also trim supply. US crude inventories, at the highest seasonal level since the EIA began compiling weekly data in 1982, are heading for the longest run of declines in more than two months.
“The market has liked what it was provided with,” said Tamas Varga, an analyst at brokerage PVM Oil Associates Ltd in London. “The deal between Opec and non- Opec has caused some understandable euphoria among market players. At the moment there seems to be a strong belief in compliance.”
West Texas Intermediate for January delivery, which expired yesterday, added 32 cents to $52.44 a barrel on the New York Mercantile Exchange at 1:09pm London time.
The contract gained 22 cents to $52.12 on Monday. Total volume traded was about 38 percent below the 100-day average. The more-active February future gained 33 cents to $53.39 a barrel.
Brent for February settlement rose 66 cents to $55.58 a barrel on the London-based ICE Futures Europe exchange after dropping 0.5 percent on Monday. The global benchmark crude traded at a premium of $2.07 to February WTI.
Crude stockpiles at Cushing, Oklahoma, the delivery point for WTI and the biggest US oil-storage hub, probably increased by 1.9 million barrels last week, according to a forecast compiled by Bloomberg.
BP Plc is spending more than $3bn adding assets and Chief Executive Officer Bob Dudley says the worst is over for the company.
Opec’s agreement to reduce oil production may help send prices above $70 a barrel next year, according to Citigroup.
President Barack Obama is preparing to block the sale of new offshore drilling rights in much of the US Arctic and parts of the Atlantic, according to two people familiar with the decision.Saudi Arabia retakes position as biggest oil seller to India, according to shipping data obtained by Bloomberg.
