Oil in Bull Market Nears $52 on Signs U.S. Stockpiles Declined

(Bloomberg) 

Oil traded near $52 after entering a bull market as U.S. industry data showed an unexpected decline in crude stockpiles, the first decrease since Hurricane Harvey shuttered refineries on the Texas coast last month.

Futures were little changed in New York. U.S. inventories fell by 761,000 barrels last week, the American Petroleum Institute was said to report. That contrasts with a Bloomberg survey, which predicts government data published Wednesday will show a fourth weekly gain.

Forecasts for rising demand, the return of U.S. Gulf Coast refiners following Harvey and Turkey’s threat to halt Kurdistan’s crude shipments pushed oil into a bull market this week. That followed a meeting of the Organization of Petroleum Exporting Countries and Russia last week that hailed the successful eroding of surplus global stockpiles. Russia signaled it would be willing to prolong the curbs further, while the group said it was too early to make a recommendation to extend the deal.

“The API numbers did surprise, and I would be even more surprised to see them being repeated” in government data, said Ole Hansen, head of commodity strategy at Saxo Bank A/S. “We have reached a price level with which even OPEC is likely to be satisfied. I’m not sure whether Russia would like to play ball for such an extended period, especially into the peak demand season.”

West Texas Intermediate for November delivery rose 3 cents to $51.91 a barrel on the New York Mercantile Exchange as of 1:38 p.m. London time. Total volume traded was about 17 percent below the 100-day average. Prices slid 34 cents to $51.88 on Tuesday.

Brent for November settlement lost 20 cents to $58.24 a barrel on the London-based ICE Futures Europe exchange after falling 58 cents on Tuesday. The global benchmark crude traded at a premium of $6.32 to WTI.

Gasoline stocks rose by 1.47 million barrels and distillates fell by 4.53 million barrels last week, the API reported Tuesday, according to a person familiar with the data. U.S. crude inventories probably rose by 3.1 million barrels, according to the Bloomberg survey before an Energy Information Administration report.

Oil-market news:

Oil-supply growth next year will be led by non-OPEC countries, mainly the U.S., Peg Mackey, chief OPEC oil analyst at the International Energy Agency, said in an interview in Singapore. Vitol Group, the world’s largest independent oil trader, posted a near 50 percent increase in first-half profit as proceeds from asset sales boosted stagnant operating profit from its core business. An alliance of Chinese independent refiners in Shandong province expects to import 20 million metric tons of crude in 2017, up 67 percent from a year earlier, according to Zhang Liucheng, vice president of one of the processors, Dongming Petrochemical Group.