Oil Stays Near $56
(Bloomberg) -- Oil traded near $56 a barrel as investors weighed a U.S. crude-stockpile surge that threatens to undermine OPEC’s bid to avert a glut against a drop in fuel inventories.
Futures in New York were little changed, after retreating 0.7 percent in the previous two sessions. U.S. crude stockpiles last week gained the most since mid-January and more than what analysts had expected, government data showed on Wednesday. Still, a larger draw in refined products inventories is helping ease some demand concerns and providing a floor for prices.
Oil’s surged over 20 percent this year as the Organization of Petroleum Exporting Countries and its allies restrained output in a bid to balance the market, while sanctions against Venezuela and Iran have kept supplies tight. The rally has lost steam since mid-February as American crude output hit record highs and investors fret over a U.S.-China trade spat.
“Oil will most likely stay in a range of $55 to $57 a barrel for a while on conflicting factors,” Ahn Yea Ha, a commodities analyst at Kiwoom Securities Co., said by phone from Seoul. “Demand appears to be still solid as fuel inventories fell despite growing U.S. crude stockpiles. This will keep prices buoyed but at the same time we have surging American supplies, restricting crude from rising higher.”
West Texas Intermediate for April delivery was at $56.23 a barrel on the New York Mercantile Exchange, up 1 cent, at 7:27 a.m. in London. Prices lost 34 cents to close at $56.22 a barrel on Wednesday.
Brent for May settlement added 14 cents to $66.13 a barrel on the London-based ICE Futures Europe exchange. The contract gained 13 cents to settle at $65.99 a barrel on Wednesday, rising for a third consecutive session. The global benchmark crude was at a $9.51 premium over WTI for the same month.
The Energy Information Administration said on Wednesday that U.S. nationwide crude inventories expanded by 7.07 million barrels last week, exceeding 1.45-million-barrel increase expected in a Bloomberg survey of analysts. Still, American stockpiles of gasoline, distillates and propane fell by a combined 8.7 million barrels, the EIA data showed.
Meanwhile, Donald Trump is said to be pushing for U.S. negotiators to move closer to a final agreement soon and end an almost yearlong trade dispute with China before his re-election campaign begins. As talks advance between the world’s two largest economies, the American president has expressed concern that the lack of an agreement could drag down equities, according to people familiar with the matter.
--With assistance from Tsuyoshi Inajima.To contact the reporter on this story: Heesu Lee in Seoul at firstname.lastname@example.org To contact the editors responsible for this story: Pratish Narayanan at email@example.com Ovais Subhani
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