Oil steadied near $48 a barrel in New York after a further reduction in U.S. crude inventories was tempered by gains in the nation’s production.
Futures slipped 0.4 percent after advancing for a second session on Wednesday. Crude stockpiles slid by 3.33 million barrels to the lowest level since January 2016, while gasoline supplies fell for the first time in three weeks, according to the Energy Information Administration. Oil production expanded further to the highest level since July 2015.
Oil in New York has fluctuated below $50 a barrel this month as investors weigh rising global output against supply cuts by members of the Organization of Petroleum Exporting Countries and its allies. Investors have been watching U.S. stockpile numbers closely, while OPEC’s efforts to drain a glut have been hindered by increasing production from shale formations and countries like Libya.
“The most recent EIA stock update gave something for both bulls and bears to cheer about,” said Stephen Brennock, an analyst at PVM Oil Associates Ltd. in London. “As has become the norm, the fly in the ointment for bulls is the march higher in U.S. crude production.”
West Texas Intermediate for October delivery was at $48.25 a barrel on the New York Mercantile Exchange, down 16 cents, at 1:29 p.m. in London. Total volume traded was about 26 percent below the 100-day average. Prices gained 58 cents, or 1.2 percent, to $48.41 on Wednesday.
Brent for October settlement fell 6 cents to $52.51 a barrel on the London-based ICE Futures Europe exchange. Prices climbed 70 cents, or 1.4 percent, to $52.57 on Wednesday. The global benchmark crude traded at a premium of $4.27 to WTI.
U.S. gasoline inventories dropped by 1.22 million barrels to 229.9 million last week, the EIA reported Wednesday. Crude output increased by 26,000 barrels a day to 9.53 million, expanding for a second week.
Libya’s Sharara field, the nation’s biggest and shut since Saturday, has not yet resumed pumping crude despite the reopening of a pipeline linking it to the coast, according to two people familiar with matter.
Saudi Arabia has moved up into second spot in the race to supply oil to China, signaling its eagerness to compete for market share in Asia’s biggest crude consumer. Tropical storm Harvey is likely to strengthen into the first hurricane to strike Texas since 2008. It has already forced workers off Gulf of Mexico platforms, sent cotton rallying and has airlines preparing for flight disruptions. Royal Dutch Shell Plc shut production at its Perdido platform in the Gulf of Mexico ahead of the tropical depression and evacuated the facility, according to a statement on the company’s website. Genel Energy Plc and DNO ASA rose to the highest in more than a year after the explorers said they agreed with the Kurdistan Regional Government to recover past dues from oil fields in northern Iraq.