NEW YORK – Oil settled higher on Tuesday as expectations of OPEC output curbs lifted prices despite forecasts that data would show a second straight weekly build in U.S. crude stockpiles.
U.S. crude inventories likely rose by 2.4 million barrels in the week to Oct. 14, a Reuters poll of oil market analysts found. In the previous week to Oct 7, stocks grew by 4.9 million barrels. [EIA/S]
The American Petroleum Institute (API), an industry group, will issue its report on domestic oil stocks at 4:30 p.m. EDT (2030 GMT), after Tuesday’s market settlement. The U.S. Energy Information Administration (EIA) will issue official numbers on Wednesday.
Brent crude settled up 16, or 0.3 percent, at $51.68 a barrel.
U.S. West Texas Intermediate crude rose 35 cents, or 0.7 percent, to settle at $50.29.
Crude prices have gained some 13 percent since the Organization of the Petroleum Exporting Countries proposed on Sept. 27 its first output cut or freeze in eight years to rein in a global crude glut. The group gathers on Nov. 30 for its policy meeting.
Doubts on whether OPEC will reach a deal that satisfies all 14 members has stalled the rally at around $50 a barrel. Most in Saudi-led OPEC need higher prices to repair economic damage after crude fell to almost $26 a barrel this year from 2014 highs above $100. Some members of the cartel, like Iran, prefer not to cut output.
“Expectations are that we will get something” at the Nov. 30 meeting, Ian Taylor, chief executive at Vitol, the world’s top oil trader, told an industry conference in London. “Whether it is quite good enough to get a substantial rebalancing in the short term, I am not sure.”
Some have a positive outlook for oil.
Analysts at Bernstein Energy said global oil inventories rose just 17 million barrels to 5.618 billion barrels in the third quarter, the smallest build since the fourth quarter of 2015.
Saudi crude exports in August fell to 7.305 million barrels per day from 7.622 million bpd in July, data showed on Tuesday.
Others said oil prices could not sustain the constant rise of recent weeks on OPEC pledges.
“We shorted WTI this morning at $51,” said Phil Davis, trader at PSW Investments in Woodland Park, New Jersey. “We think ultimately that over the course of the next 30 days or so, it will drop down to $37.50 or possibly lower.”