Oil Gains With U.S. Inventory Data Set to Show Sliding Supplies

Oil extended gains as U.S. industry data showed a decline in crude and fuel stockpiles ahead of government figures due later Wednesday.

Futures rose as much as 0.6 percent in New York after adding 0.9 percent on Tuesday. U.S. inventories of crude, gasoline and distillates fell last week, the American Petroleum Institute was said to report. Meanwhile, China announced a package of policies to spur domestic growth in the face of rising trade frictions with the U.S.

“Tightening oil supplies in the U.S. have spurred buying pressures, though these should not be taken for granted in this era of uncertainty,” Stephen Brennock, an analyst at PVM Oil Associates Ltd., wrote in a report.

Crude has struggled to regain the highs of June as an intensifying trade spat between the U.S. and China, the world’s biggest oil importer, threatens to hurt demand. Investors are also gauging the extent to which renewed U.S. sanctions on Iran may reduce global supplies, even as the Organization of Petroleum Exporting Countries pledges to increase production.

West Texas Intermediate crude for September delivery climbed as much as 41 cents to $68.93 a barrel on the New York Mercantile Exchange, and was at $68.58 as of 11:10 a.m. London time. The contract rose 63 cents on Tuesday. Total volume traded Wednesday was 39 percent below the 100-day average.

Brent for September settlement advanced 61 cents to $74.05 a barrel on the London-based ICE Futures Europe exchange. The global benchmark crude traded at a $5.48 premium to WTI.

Inventory Decline

U.S. crude stockpiles dropped 3.16 million barrels last week, while inventories at the Cushing storage hub in Oklahoma fell by 808,000 barrels, the API was said to report. If the Cushing drop is confirmed by the Energy Information Administration’s data, it would be the 10th consecutive weekly decrease.

In China, financial markets are rediscovering an appetite for risk not seen in months, taking cues from the government’s push to revive a slowing economy. Its plans for fiscal spending and softer regulation are easing concerns over trade tensions between the world’s two largest economies, which have prompted ministers and central bankers from the Group of 20 nations to warn of risks to growth.

Oil-market news:

Vitol Group paid a record of more than $1.6 billion to its top executives and staff through share buybacks last year, highlighting the riches enjoyed by the partners who own the world’s largest oil-trading house. Exports of North Sea crudes to the Mediterranean have reached a year-high so far this month, after supply outages in Libya facilitated the flow, according to shipping data and traders. Crude inventories in the European storage hub at Amsterdam, Rotterdam and Antwerp rose by 3.3 million barrels last week, according to Genscape data.