London
Oil halted its slide below $45 a barrel as investors weigh a forecast decline in US crude stockpiles against a revival in output from Libya, which is exempt from the Opec-led cuts.
Futures rose 0.3 per cent in New York after falling 1.2 per cent on Monday. US inventories probably shrank by 1.2 million barrels last week, according to a Bloomberg survey before Energy Information Administration data Wednesday. Libya is pumping the most oil in four years after a deal with Wintershall AG enabled at least two fields to resume production.
Oil slid below $45 a barrel to the lowest close in seven months on Thursday amid concerns that rising US supplies will offset output cuts by the Organisation of Petroleum Exporting Countries and allies including Russia. Traders are storing more crude at sea amid swelling production in the Atlantic region, a sign the market is far from rebalancing.
“Investors will continue to cut positions until larger inventory declines materialise,” said Giovanni Staunovo, an analyst at UBS Group AG. “Market participants appear to be testing Saudi and Russia’s resolve to do ‘whatever it takes’ to reduce global oil inventories.”
West Texas Intermediate for July delivery, which expires Tuesday, was at $44.32 a barrel on the New York Mercantile Exchange at 9:30am in London. Total volume traded was about 12 per cent below the 100-day average. The more-active August contract rose 16 cents to $44.59 at 9:09am in London.
For more on how tanker storage is undermining Opec’s cuts, click here
Brent for August settlement climbed 16 cents to $47.07 a barrel on the London-based ICE Futures Europe exchange. Prices fell 1 per cent to $46.91 on Monday. The global benchmark crude traded at a premium of $2.49 to August WTI.
US crude stockpiles remain more than 100 million barrels above the five-year average, according to data from the EIA. American production has climbed to 9.33 million barrels a day through June 9, near the highest since August 2015.
