Oil Closes Near $53
(Bloomberg) -- Oil was little changed Tuesday as the market awaited U.S. crude inventory figures and continued to speculate on the outcome of a potential OPEC+ meeting in coming weeks.
Futures closed 1 cent higher at $53.27 a barrel in New York as traders looked ahead to the industry-funded American Petroleum Institute’s report scheduled for 4:30 p.m. in Washington, and U.S. government inventory numbers that are due on Wednesday. U.S. stockpiles probably shrank by 1 million barrels last week, according to a Bloomberg survey, which would be the biggest decline since May.
The U.S. Energy Information Administration has reported U.S. crude inventory builds for three out of the last four weeks of data. That’s a bearish indicator, said Tariq Zahir, a commodity fund manager at New York-based Tyche Capital Advisors LLC, since drawdowns of stockpiles normally occur this time of year.
Crude edged higher earlier in the session amid speculation that the Organization of Petroleum Exporting Countries and its allies will reach an agreement to extend supply curbs when it meets the coming weeks, said James Williams, president at WTRG Economics in London, Arkansas.
“We probably have some upside here in oil, commodities and risky assets," Jeffrey Currie, global head of commodities research at Goldman Sachs Group, said in a Bloomberg Television interview.
In a separate interview, Currie pointed to the U.S.-China trade dispute complicating OPEC+’s task of balancing supply and demand. Current demand growth “neither will support exiting the production agreement, nor is bad enough to reinforce more cuts,” he said.
West Texas Intermediate futures trading stood at 1.04 million contracts Tuesday, according to preliminary numbers, the lowest since May 21. The contract fell 73 cents to close at $53.26 on Monday, snapping a two-day gain.
Brent for August settlement dropped $1 to $62.29 a barrel on London’s ICE Futures Europe Exchange. It closed up 2.6% on Friday. The global benchmark crude was trading at an $8.6 premium to WTI for the same month.
Other oil-market news:
- BP said in its annual energy statistical review released Tuesday that the oil market’s "rollercoaster" would run for some time to come, with slowing economic expansion possibly impacting demand.
- Saudi Aramco gave full contractual crude supply for July sales to at least four customers in Asia, according to people with knowledge of the matter.
- Oil refining margins in northwest Europe are collapsing, the latest sign of weak demand for crude that’s driven prices into bear-market territory this month.
- Trafigura Group Ltd. racked up a 92% gain in profit in the first half of its financial year, taking advantage of price swings in the petroleum market and a dominant position exporting crude from the U.S.
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