(Bloomberg) Oil traded near $60 a barrel amid forecast U.S. crude inventories fell for a fifth week, while some production in the Gulf of Mexico is returning as a tropical storm eased.Futures were up 0.2% in New York after sliding 1.1% on Monday. Oil producers and refiners along the coast are restoring operations after storm Barry was downgraded, with about 69% of crude output in the Gulf still shuttered, down from a peak of 73% on Sunday. American crude inventories probably declined by 2.75 million barrels, according to a Bloomberg survey.While oil has rallied about 16% since mid-June on shrinking American stockpiles, rising tensions with Iran and extended OPEC cuts, concerns about expanding supply and weakening demand continue to dent the outlook. China’s economy slowed to the weakest pace in almost three decades in the second quarter amid an ongoing trade dispute with the U.S., while the International Energy Agency said Friday that global inventories unexpectedly swelled in the first half of this year.
“OPEC needs to keep a lid on production and potentially cut more if it’s going to continue to manage prices around the $70 a barrel mark,” Sanford C. Bernstein analyst Oswald Clint said in a Bloomberg TV interview. “In the short-term, given that we’re in peak driving season, we’re going to continue to see inventories draw.”
August West Texas Intermediate rose by 13 cents to $59.71 on the New York Mercantile Exchange as of 10:46 a.m. in London. Brent for September settlement rose 13 cents to $66.61 a barrel on the ICE Futures Europe Exchange and traded at a premium of $6.80 to WTI for the same month.
Royal Dutch Shell Plc and ConocoPhillips are among companies seeking to restore output at offshore platforms in the Gulf of Mexico now that weather conditions have improved after Barry made landfall. The region accounts for 16% of total U.S. crude oil production, according to the Energy Department.
Other oil-market news:
The fracklog in major U.S. shale plays fell for a fourth straight month, the longest stretch of declines since 2016, according to the EIA’s Drilling Productivity Report released Monday.
Supertanker Atlantic Pioneer, an Isle of Man-flagged vessel, was escorted through the Strait of Hormuz by a British naval ship on Friday, says a spokeswoman for Mitsui OSK Lines, which owns the vessel.
Iraq’s Basrah oil port is operating fully after a fire, according to the Basrah Oil Company.
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