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Oil Steady Amid Estimates of Further Gain in U.S. Stockpiles


By Saket Sundria and Grant Smith

(Bloomberg)
Oil held steady as estimates of brimming U.S. crude stockpiles added to signs that, with demand constrained by weak economic growth, markets remain comfortably supplied.West Texas Intermediate futures were little changed above $53 a barrel after falling for the past two days. U.S. crude inventories probably rose for a sixth time last week, the longest run of gains in almost a year, according to a Bloomberg survey before government data due Wednesday.

Oil prices have slid from a peak reached in April as the trade dispute between Beijing and Washington weakens an already-fragile economic outlook, and with it the prospects for fuel demand. While President Donald Trump said negotiations are advancing, the impasse continues to weigh on sentiment.

Weak demand linked to the trade war accounts for 70% of the decline

“The market looks pretty weak,” said Eugen Weinberg, head of commodities research at Commerzbank AG in Frankfurt. “It’s being dragged down by downbeat economic expectations and demand forecasts, and strong production in the U.S. and elsewhere.”

WTI for November delivery, which expires Tuesday, rose 18 cents to $53.49 a barrel on the New York Mercantile Exchange as of 10:02 a.m. London time — its most recent trade. The more active December contract gained 19 cents to $53.70 at 10:37 a.m.

Brent for December settlement increased 29 cents to $59.25 a barrel on the London-based ICE Futures Europe Exchange, after closing down 0.8% on Monday. The global benchmark crude traded at a premium of $5.55 to WTI for the same month.

See also: Chinese Contractor Ends Oil-Project Deals With Venezuelan Firms

U.S. crude stockpiles probably increased by 3 million barrels last week, according to the median estimate of 11 analysts surveyed by Bloomberg. If confirmed by the Energy Information Administration, it would be the longest run of gains since November. The industry’s own data is due later Tuesday.

“Given the fact we are in the storage buildup phase right now, it’s difficult to see a sudden turnaround” for prices, Weinberg said.

Other oil market news
  • Goldman Sachs Group Inc. cut its 2020 forecast for U.S. oil-output growth to 700,000 barrels a day from 1 million a day, citing lower activity and steeper decline rates. The bank also trimmed its global oil-demand growth estimate.
  • Saudi Aramco is back to producing crude at normal levels after it raised output briefly to re-stock storage depleted after the September attacks, said Ibrahim Al-Buainain, chief executive officer of state-owned Aramco’s energy trading unit.
  • The price of jet fuel in Asia has fallen to the biggest discount against diesel since mid-August as high freight rates take a bigger toll on airplane fuel and as IMO 2020 buoys diesel, according to three middle-distillates traders.
  • Traders are sending record amounts of Eastern Canadian crude to Europe’s biggest port and oil-trading hub. The Netherlands has received 9 million barrels from Newfoundland province this year, according to Statistics Canada. That’s double what it took in 2018.


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