Oil recovers from two-month low on report of U.S. supply decline
NEW YORK (Bloomberg) -- Oil rose from the lowest close in more than two months as U.S. industry data showed crude supplies fell in the world’s biggest consumer.
Futures climbed as much as 2.2% in New York. Inventories dropped by 482,000 bbl through Nov. 13, the American Petroleum Institute was said to report. Energy Information Administration data Wednesday will probably show stockpiles expanded by 2 MMbbl for an eighth weekly gain, according to a Bloomberg survey. Prices also gained after French air strikes on Islamic State targets in Syria heightened Middle East tensions.
"I don’t expect the EIA data to confirm yesterday’s API and think we’ll see more downward pressure," John Kilduff, a partner at Again Capital LLC, a New York-based hedge fund, said by phone. "Prices will probably soon break below $40 a barrel and then reach new lows for the year. Supplies are just too high."
Crude has plunged 45% the past year on speculation a global glut will be prolonged as the Organization of Petroleum Exporting Countries continues to pump above its collective quota. Iran won’t negotiate with OPEC or seek the group’s permission before boosting exports once sanctions are removed, Oil Minister Bijan Namdar Zanganeh said Tuesday.
West Texas Intermediate for December delivery rose 53 cents, or 1.3%, to $41.20/bbl at 9:08 a.m. on the New York Mercantile Exchange. The contract fell 2.6% to $40.67 on Tuesday, the lowest close since Aug. 26. The volume of all futures traded was 32% above the 100-day average.
Cushing Stockpiles
Brent for January settlement climbed 74 cents, or 1.7%, to $44.31/bbl on the London-based ICE Futures Europe exchange. The European benchmark crude was at a $2.05 premium to January WTI.
Crude stockpiles at Cushing, Oklahoma, the delivery point for WTI and the biggest U.S. oil-storage hub, rose by 1.3 MMbbl last week, the API said Tuesday, according to Twitter postings and a person familiar with the figures.
Iran, OPEC’s fifth-biggest producer, is unconcerned about the impact additional supply may have on crude prices, which already reflect the expected increase in shipments, Oil Minister Zanganeh said at a news conference in Tehran. The nation will inform the 12-member group after it increases exports, he said.
OPEC’s board of governors was unable to agree on the group’s long-term strategy plan and won’t present it to oil ministers when they meet on Dec. 4 in Vienna, said two OPEC delegates with knowledge of the matter. Approval of the plan is delayed until at least the next meeting of governors in 2016, said the delegates, who asked not to be identified because the plan isn’t public.
