November 2, 2017 by Ben Sharples and Grant Smith
Oil traded near $54 a barrel as traders remained cautious on how quickly a global oil glut is diminishing.
Futures were little changed in New York after falling 0.2 percent Wednesday. Crude inventories fell by 2.44 million barrels for a fifth decline in six weeks, according to the Energy Information Administration. U.S. oil production rose a second week. OPEC output slid in October as tensions between Iraq’s central government and the semi-autonomous Kurdistan region crimped supply.
Oil advanced for a second month in October on signs the Organization of Petroleum Exporting Countries will agree at its Nov. 30 meeting to prolong cuts by its members and allied nations. The United Arab Emirates backs extending the supply agreement, Energy Minister Suhail Al Mazrouei said Wednesday, echoing earlier support by Saudi Arabia and Russia.
“OPEC may be trumpeting success as inventories close their gap to the most recent five-year average,” said Harry Tchilinguirian, head of commodity markets strategy at BNP Paribas SA. “It has progressed, but OPEC is not out of the woods. The stock-draws are not enough to reverse the large builds in oil inventories that we saw between 2014 and 2016.”
West Texas Intermediate for December delivery was at $54.37 a barrel on the New York Mercantile Exchange, up 7 cents, at 10:14 a.m. in London. Total volume traded was 5 percent above the 100-day average. Prices slid 8 cents to $54.30 on Wednesday, the first drop in five sessions.
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Brent for January settlement lost 12 cents to $60.37 a barrel on the London-based ICE Futures Europe exchange. Prices fell for the first time in seven sessions on Wednesday to $60.49. The global benchmark crude traded at a premium of $5.81 to January WTI.
U.S. crude output rose by 46,000 barrels a day to 9.55 million a day, according to a report Wednesday by the EIA. That’s the highest level in a month. Gasoline stockpiles fell for a second week to 212.8 million barrels, the lowest level since August 2015.
Royal Dutch Shell Plc released third-quarter earnings Thursday that beat expectations and showed the European major has taken Exxon Mobil Corp.’s cash-flow crown, a year after completing the biggest deal in its history. OPEC output slid by 180,000 barrels a day in October from September, with overall production dipping to 32.59 million barrels a day, according to a Bloomberg survey of analysts, oil companies and ship-tracking data. There have been signs of strength in the oil market since the middle of the year, Saudi Arabia’s Oil Minister Khalid Al-Falih said in Bangkok.