Oil rises for second day as U.S. crude stockpiles seen falling
By Bloomberg
Oil advanced for a second day before U.S. government data forecast to show crude stockpiles declined in the world’s biggest consumer.
Futures rose as much as 0.7 percent in New York. Crude inventories probably shrank by 1.63 million barrels for a second weekly drop through July 31, according to a Bloomberg survey of analysts before an Energy Information Administration report Wednesday. The new head of Libya’s state oil company for the eastern region is considering resuming exports from the nation’s two largest ports and will seek to boost production.
Oil is still trading near the lowest price in almost five months after falling 21 percent in July, the most since 2008, on signs a global supply glut is persisting. U.S. crude stockpiles remain close to 100 million barrels above the five-year seasonal average, while members of the Organization of Petroleum Exporting Countries are pumping more to defend market share.
“There is a real chance prices could drift sideways for a bit before resuming a decline,” Ric Spooner, a chief analyst at CMC Markets in Sydney, said by phone. “The basic drivers of oil are still U.S. and OPEC production, which are more than adequate to meet demand.”
West Texas Intermediate for September delivery climbed as much as 34 cents to $46.08 a barrel on the New York Mercantile Exchange and was at $46.04 at 1:06 p.m. Singapore time. The contract gained 57 cents to $45.74 on Tuesday. Total volume was about 56 percent below the 100-day average. Prices have slid 14 percent this year.
U.S. Supplies
Brent for September settlement advanced as much as 38 cents, or 0.8 percent, to $50.37 a barrel on the London-based ICE Futures Europe exchange. It increased 47 cents to $49.99 on Tuesday. The European benchmark grade traded at a premium of $4.30 to WTI.
U.S. crude inventories decreased to 459.7 million barrels through July 24, the lowest level since March, according to the EIA. Production averaged 9.41 million barrels a day during the week, the slowest pace in more than two months.
Libya plans to lift force majeure at its Es Sider and Ras Lanuf ports that were closed in December amid militia attacks, Nagi Elmagrabi, the chairman of the National Oil Corp. for the eastern region, said Tuesday. Tribal and political disputes have almost completely halted onshore crude output in the western region.
The North African country is OPEC’s smallest producer with 380,000 barrels a day of output, data compiled by Bloomberg show. The group’s two leading members, Saudi Arabia and Iraq, pumped at a record in July.
The Bloomberg Commodity Index of 22 raw materials slumped about 11 percent last month, the most since September 2011. It’s rising for a second day Wednesday.