Oil Holds Gains as OPEC Sees Recovery, Storm Curbs U.S. Output

(Bloomberg) 

Oil held gains near $51 a barrel as OPEC Secretary-General Mohammad Barkindo reiterated a rapid market re-balancing is under way, while U.S. production was again disrupted by a storm.

Futures added 0.7 percent in New York after advancing 3.3 percent the previous two sessions. The global economic recovery has gained traction and oil de-stocking gathered pace in recent months, Barkindo said Tuesday. Producers in the U.S. Gulf have cut output by a million barrels a day, or 59 percent, because of Tropical Storm Nate, the Bureau of Safety & Environmental Enforcement said.

Oil has inched higher in the past few days — following the biggest weekly loss since May — on signs of tighter supply. U.S. crude stockpiles probably fell by 2.4 million barrels last week, according to a Bloomberg survey before an Energy Information Administration report Thursday. Barkindo, speaking in New Delhi, said the Organization of Petroleum Exporting Countries had boosted oil-demand estimates for this year and next.

“OPEC is talking to a market which is currently prepared to listen, given the visible improvements seen during the past few months,” said Ole Sloth Hansen, head of commodity strategy at Saxo Bank A/S.

West Texas Intermediate for November delivery was at $51.25 a barrel on the New York Mercantile Exchange, up 33 cents, at 12:39 p.m. London time. Total volume traded was in line with the 100-day average. Prices rose $1.34 to $50.92 on Tuesday, the biggest gain in two weeks.

Brent for December settlement climbed 16 cents to $56.77 a barrel on the London-based ICE Futures Europe exchange, after jumping 82 cents on Tuesday. The global benchmark crude traded at a premium of $5.21 to December WTI.

Oil-market news:

Pierre Andurand’s hedge fund trailed the oil-price rally last month, posting a 2.4 percent gain compared with the almost 10 percent boost for Brent crude, according to people familiar with the performance. OPEC and other producers shouldn’t extend supply cuts beyond their expiry at the end of March if prices rise to $60 a barrel, according to Vagit Alekperov, chief executive officer of Russia’s Lukoil PJSC. Saudi Arabia’s output next month will drop to the lowest since January 2015, at 9.77 million barrels a day, according to production plans published by the energy ministry.