HONG KONG: Oil resumed its decline as US production increased for an 11th week in the longest run of gains since 2012.
Futures lost as much as 1 per cent in New York after climbing 0.3 per cent on Wednesday. Crude output rose to 9.29 million barrels a day, the highest level since August 2015, according to the Energy Information Administration. US inventories fell less than all 11 forecasts by analysts surveyed by Bloomberg. Opec is likely to extend production cuts for six months past June, according to Nigerian Oil Minister Emmanuel Ibe Kachikwu.
West Texas Intermediate for June delivery slid as much as 46 cents to $47.36 a barrel on the New York Mercantile Exchange, and was at $47.45 at 8:24am in London. Total volume traded was about 13 per cent below the 100-day average. The contract gained 16 cents to $47.82 on Wednesday.
Brent for July settlement fell as much as 48 cents, or 1 per cent, to $50.31 a barrel on the London-based ICE Futures Europe exchange. The contract rose 33 cents to $50.79 Wednesday. The global benchmark crude traded at a premium of $2.60 to July WTI.
Oil is heading for a third weekly loss amid concern that increasing US output will offset efforts by the Organisation of Petroleum Exporting Countries and its allies to eliminate a global glut. Opec will meet May 25 in Vienna to decide whether to extend supply cuts through the second half. Russia is said to support prolonging the curbs, according to a government official.
“While US production is rising, we’re not going to see any sustainable rally in the oil price,” said David Lennox, a resource analyst at Fat Prophets in Sydney. “The market is going to need some positive news from Opec.”
US crude output increased by 28,000 barrels a day last week for the longest run of gains since the week ended Nov. 23, 2012, according to EIA data. Nationwide stockpiles fell by 930,000 barrels, compared with the median estimate for a 3 million-barrel drop in the Bloomberg survey.
