Oil steadied near $57 a barrel as traders weighed OPEC’s production cuts against the prospect of a fresh surge in U.S. supplies.
Futures slipped 0.4 percent in New York after dropping 1.5 percent Monday, the most in three weeks. OPEC’s November output slid to a six-month low, led by declines from Angola and Kuwait, according to a Bloomberg survey. In the U.S., production has risen over the past month, though inventories probably fell last week, a separate survey showed before a government report Wednesday.
Oil is averaging about $54 a barrel this quarter, the highest in more than two years as global supply tightens and as the Organization of Petroleum Exporting Countries and its allies agreed to extend output curbs until the end of 2018. OPEC’s pact has bolstered prices, giving U.S. shale drillers the confidence to invest more in expanding production.
“Looking ahead, we see the tightening of the global oil market balance slowing and partially reversing,” said Norbert Ruecker, head of commodity research at Julius Baer Group Ltd. in Zurich. “Christmas has come early for the shale business.”
West Texas Intermediate for January delivery fell 20 cents to $57.27 a barrel on the New York Mercantile Exchange at 8:22 a.m. local time. Total volume traded was about 23 percent below the 100-day average. Prices lost 89 cents to $57.47 on Monday, the first drop in three sessions.
Brent for February settlement slid 3 cents to $62.42 a barrel on the London-based ICE Futures Europe exchange after declining 2 percent on Monday. The global benchmark crude traded at a premium of $5.11 to February WTI.
U.S. crude stockpiles probably shrank by 2.5 million barrels last week, according to a forecast compiled by Bloomberg before an Energy Information Administration report on Wednesday.
Inventories at Cushing, Oklahoma, the delivery point for WTI, probably dropped by 2.4 million barrels, the survey showed. Inventories at the hub slid for a third week through Nov. 24 to 58.3 million barrels, the lowest since September.
OPEC’s output in November fell by 80,000 barrels a day to 32.47 million a day, the lowest level since May, according to the Bloomberg survey of analysts, oil companies and ship-tracking data. Goldman Sachs Group Inc. raised its price forecast for Brent in 2018 to $62 a barrel from $58 and for WTI to $57.50 from $55 on lower inventories next year as OPEC and its allies extend supply cuts.