Oil Steady Before U.S. Stockpiles Data as OPEC Reassures Market

(Bloomberg) 

Oil was little changed before the release of U.S. inventory data, while OPEC and its allies reassured traders that they’ll complete their strategy to clear a global crude surplus.

Futures slipped 0.3 percent in New York after rising 1.1 percent on Tuesday. Government data Wednesday is forecast to show that inventories of crude oil fell and gasoline rose last week, both for the fifth week. OPEC’s exit strategy is an effort to reassure investors that the group won’t flood the market once output curbs finally expire, according to people familiar with its deliberations.

Oil is holding gains above $50 a barrel as speculation mounts that supply cuts by members of the Organization of Petroleum Exporting Countries and its allies including Russia will be extended when they meet in Vienna on Nov. 30. The group and its partners, which together control more than half the world’s crude output, last week sent the strongest signal yet that their deal will be extended beyond the current expiry in March until the end of 2018.

OPEC’s de facto leader, Saudi Arabia, has “promised a smooth exit from the current supply pact in order to prevent a potential return of the supply imbalance,” Stephen Brennock, an analyst at PVM Oil Associates Ltd. in London, said in a note.

West Texas Intermediate for December delivery was at $52.30 a barrel on the New York Mercantile Exchange, down 17 cents, at 8:20 a.m. local time. Total volume traded was about 46 percent below the 100-day average. Prices advanced 57 cents to $52.47 on Tuesday.

Brent for December settlement rose 2 cents to $58.35 a barrel on the London-based ICE Futures Europe exchange, after gaining 1.7 percent on Tuesday. The global benchmark crude traded at a premium of $6.09 to WTI.

An Energy Information Administration report Wednesday is forecast to show U.S. crude stockpiles fell by 3 million barrels last week, according to the median estimate in a Bloomberg survey of analysts. Gasoline inventories probably rose by 1.7 million barrels, the survey showed. Both estimates contrast with figures from the American Petroleum Institute, which was said to report an increase in crude stockpiles and a decline in gasoline.

Oil-market news:

OPEC’s talks on an exit strategy are at a preliminary stage and the group is likely to endorse the outline of the plan when it meets next month, according to people familiar with the matter. Iraq’s semi-autonomous Kurdistan Regional Government said it’s prepared to freeze the results of last month’s independence referendum that led to deadly clashes with government troops and hurt oil exports.