London: Oil resumed its decline on indications US crude inventories expanded for a sixth week, the longest run of gains in almost a year.
Futures fell 0.6 per cent in New York, paring some of Tuesday’s 1.8 per cent gain that was driven by a report that Opec and its allies will consider deepening production cuts when they meet in December. The American Petroleum Institute reported crude stockpiles rose by 4.45 million barrels last week, according to people familiar. Official government figures are due Wednesday.
Oil has slumped about 18 per cent from an April peak as the US-China trade war dented demand and as global supplies swelled. The Organisation of Petroleum Exporting Countries and its partners are concerned about the demand outlook next year, Reuters reported, citing unnamed Opec sources.
“If we see that the official number is in line with the API data, I suspect we would see a severe reaction and heavy selling in crude markets,” said Michael McCarthy, chief market strategist at CMC Markets Asia Pacific Pty in Sydney. “The next Opec meeting is not until December. The market will remain cautious and is very vulnerable to headline risk.”
West Texas Intermediate crude for December delivery dropped 32 cents to $54.16 a barrel on the New York Mercantile Exchange as of 8:22am in London. The November contract expired Tuesday after adding 85 cents to close at $54.16.
Brent for December settlement fell 24 cents to $59.46 on the London-based ICE Futures Europe Exchange. The contract gained 74 cents to $59.70 on Tuesday. The global benchmark crude traded at a $5.30 premium to WTI.
US crude stockpiles probably rose by 3 million barrels last week, according to the median estimate in a Bloomberg survey before data from the Energy Information Administration. Gasoline inventories declined by 702,000 barrels in the week ended Oct. 18.
Brent crude is likely to trade around $60 a barrel in 2020 even as Opec+ production holds around its fourth quarter level, according to Goldman Sachs Group Inc. The bank cut its global oil demand growth forecast for next year to 1.25 million barrels a day, from 1.45 million.