Oil Steadies Near $62 as U.S. Crude Stockpiles Seen Declining

Oil steadied near $62 a barrel on estimates that U.S. crude stockpiles declined for an eighth week as the rebalancing of global markets continues.

Futures added as much as 1.3 percent in New York to the highest intraday level in almost three years. U.S. inventories probably fell by 3.75 million barrels last week, according to a Bloomberg survey before an Energy Information Administration report Wednesday.

Oil had its best start to a year in five years as the Organization of Petroleum Exporting Countries and its allies continue supply cuts to drain a global glut. U.S. drilling has continued to slow, with explorers trimming the number of rigs targeting crude last week by the most since November.

“The general expectation is that we are likely to see a crude oil drawdown,” said Hamza Khan, head of commodities strategy at ING Bank NV.

West Texas Intermediate for February delivery gained as much as 83 cents to $62.56 a barrel on the New York Mercantile Exchange, the highest intraday price since May 2015, and was at $61.88 at 10:24 a.m. in London. Total volume traded was about 32 percent above the 100-day average.

Brent for March settlement gained as much as 51 cents, or 0.8 percent, to $68.29 a barrel on the London-based ICE Futures Europe exchange, the highest since May 2015. The global benchmark crude traded at a premium of $5.98 to March WTI.

U.S. crude stockpiles at Cushing, Oklahoma, the delivery point for WTI and the nation’s biggest oil-storage hub, probably fell by 1.5 million barrels last week, according to a forecast compiled by Bloomberg. Inventories slid below 50 million barrels through the week ended Dec. 29, the first time below that level since February 2015, according to EIA data.

Oil-market news:

Iranian Oil Minister Bijan Namdar Zanganeh said that OPEC doesn’t want to see Brent prices above $60 a barrel because of the impact on shale oil, ministry news service Shana reported. Libyan crude output is said to have increased to about 1 million barrels a day after recovering from disruptions including repairs to a pipeline, according to a person familiar with the matter. Saudi Aramco sold full contractual crude volumes for February to four Asian companies, according to traders who asked not to be identified.