Oil Steadies Amid Mixed Signals on U.S. Crude Inventories

(Bloomberg) 

Oil was steady amid mixed signals on U.S. crude inventories, with industry data showing supplies increased last week while government statistics were expected to indicate a decline.

Futures were little changed in New York after adding 0.8 percent on Tuesday. U.S. inventories rose by 1.63 million barrels last week, according to people familiar with the American Petroleum Institute data. That contrasts with a Bloomberg survey before an Energy Information Administration report Wednesday that forecasts a 3.5 million-barrel decline, which would be the 13th drop in 15 weeks.

Oil has lingered below $50 a barrel despite an agreement by the Organization of Petroleum Exporting Countries and its allies to curb output amid stubbornly high global supplies. Concern is growing that the deal may fray after OPEC member Ecuador said this week that it won’t be able to maintain its pledged cuts.

“Only continuous falls in total U.S. commercial and crude oil stocks will provide us with credible evidence that re-balancing is, in fact, happening,” said Tamas Varga, an analyst at PVM Oil Associates Ltd. in London.

Brimming Supply

West Texas Intermediate for August delivery, which expires Thursday, was at $46.55 a barrel on the New York Mercantile Exchange, up 15 cents, at 12:58 p.m. in London. Total volume traded was about 2 percent below the 100-day average. Prices advanced 38 cents to settle at $46.40 Tuesday. The more-active September climbed 14 cents to $46.73.

Brent for September settlement rose 23 cents to $49.07 a barrel on the London-based ICE Futures Europe exchange. Prices gained 42 cents to end Tuesday’s session at $48.84. The global benchmark crude traded at a premium of $2.33 to September WTI.

Ecuador Oil Minister Carlos Perez said late on Monday the nation will start raising oil production this month, arguing it needs the money. On Tuesday, after speaking with Saudi Arabia’s energy minister, Perez issued a statement saying his country and the Saudis remain committed to reducing inventories to a “normal” level as part of OPEC’s strategy to boost crude prices.

Crude stockpiles at Cushing, Oklahoma, the delivery point for WTI and the biggest U.S. oil-storage hub, climbed by 608,000 barrels last week, the API was said to report. They probably declined by 1.5 million barrels, according to a forecast compiled by Bloomberg. Meanwhile U.S. gasoline inventories fell by 5.45 million barrels and distillates by 2.89 million, according to the API.

Oil-market news:

Saudi Arabia’s crude shipments fell to 6.924 million barrels a day in May from 7.006 million barrels a day in April, according to JODI data. Iraq’s exports rose 1.7 percent to 3.818 million barrels a day, the data showed. Libya will participate in a technical meeting with fellow OPEC members as well as Russia in St. Petersburg on July 22 to share the “factors enabling and constraining Libya’s production recovery,” said Mustafa Sanalla, chairman of state-run National Oil Corp.