New York: Oil held gains above $43 (Dh158) a barrel ahead of US government data forecast to show crude stockpiles extended declines from a record.

Futures added as much as 0.9 per cent in New York after rising 2 per cent in the previous three sessions. Inventories probably dropped by 2.25 million barrels last week, a Bloomberg survey shows before an Energy Information Administration report Wednesday. Stockpiles peaked at the end of March. Shale producers in the US Permian basin will be able to make money even if the price falls to the mid-$20s, according to Scott Sheffield, chairman of Pioneer Natural Resources Co.

Oil in New York and London tumbled into a bear market last week on concerns that expanding global supply will counter output cuts from the Organisation of Petroleum Exporting Countries and its partners including Russia. US crude drillers added rigs for a 23rd straight week, the longest stretch in at least three decades, according to data Friday from Baker Hughes Inc.

“The market is primed for a more aggressive response to really good inventory data,” said Ric Spooner, an analyst at CMC Markets in Sydney. “The upside potential for US output could be limited because of the lower price.”

West Texas Intermediate for August delivery was at $43.66 a barrel on the New York Mercantile Exchange, up 28 cents, at 3:26pm in Hong Kong. Total volume traded was about 19 per cent below the 100-day average. The contract rose 37 cents, or 0.9 per cent, to $43.38 on Monday. Prices are down about 10 per cent this month, the most since July.

Brent for August settlement was 33 cents higher at $46.16 a barrel on the London-based ICE Futures Europe exchange. The contract added 29 cents, or 0.6 per cent, to $45.83 on Monday. The global benchmark crude traded at a premium of $2.50 to WTI.

Weekly US crude stockpiles peaked at a record 535.5 million barrels in the week ended March 31, according to EIA data. While inventories have steadily declined, American oil production has climbed above 9.3 million barrels a day to the highest level since August 2015.

— Bloomberg