Oil rally stalls as American crude stockpiles seen rising
NEW YORK (Bloomberg) -- Oil halted its rally as the market anticipates another increase in U.S. stockpiles.
Futures closed just 3 cents higher as a Bloomberg survey showed crude storage in tanks and terminals across the country likely rose 3 MMbbl last week. The government’s closely watched weekly report on Wednesday is preceded by data from the industry-funded American Petroleum Institute later on Tuesday.
“People are waiting to see: Will storage volumes point toward a tighter fundamental outlook?” said Gene McGillian, a market research manager at Tradition Energy in Stamford, Connecticut. “It does appear as if we need more evidence that the rebalance continues to really ignite a rally again.”
Crude has closed above $60/bbl over the last two weeks as the Organization of Petroleum Exporting Countries and allied producers work to tighten global markets through supply cuts. While the U.S. Energy Information Administration sees worldwide supplies accelerating this year and the next, with estimates for demand growth shrinking, Saudi Aramco CEO Amin Nasser said he isn’t losing any sleep over peak oil demand.
West Texas Intermediate for April settled at $62.60/bbl on the New York Mercantile Exchange, the highest level in a week. Total volume traded was about 6 percent below the 100-day average.
Brent for May settlement added 25 cents to end the session at $65.79/bbl on the London-based ICE Futures Europe Exchange. The global benchmark traded at a $3.34 premium to May WTI.
The EIA also boosted its U.S. crude output forecasts for 2018 and 2019, and said that production would top 11 MMbpd in October -- a month ahead of prior estimates.
Other oil-market news:
Gasoline futures fell 0.1% to settle at $1.9331/gal. OPEC needs to embrace its role as the world’s “baffle" on oil prices if it wants to keep crude markets stable, ConocoPhillips Chief Executive Officer Ryan Lance said in an interview with Bloomberg TV on Tuesday. Rail companies will start shipping more western Canadian crude by mid-year, helping clear a glut that’s devastated prices, Cenovus Energy Inc. CEO Alex Pourbaix said in an interview. Chevron Corp. doubled its forecast for production from the Permian shale basin, adding to signs that U.S. shale growth will continue to upend global energy markets.
