Oil extended its advance to near $50 a barrel as weekly U.S. industry data showed crude stockpiles declined, easing a glut.
Futures rose as much as 1.5 percent in New York after climbing 1.1 percent Tuesday. Inventories dropped by 5.14 million barrels last week, the American Petroleum Institute was said to report. Data from the Energy Information Administration Wednesday is forecast to show supplies fell. Canadian oil-sands producers that cut more than 1 million barrels a day from the market because of the threat of wildfires are starting the process of resuming operations.
Oil has surged more than 85 percent from a 12-year low earlier this year on signs the global glut will ease amid declining supply in Nigeria and non-OPEC countries including the U.S. The Organization of Petroleum Exporting Countries is unlikely to set an output target when it meets June 2 as it sticks with Saudi Arabia’s strategy of squeezing out rivals, according to all but one of 27 analysts surveyed by Bloomberg.
“The API crude inventory number is very bullish,” Angus Nicholson, an analyst at IG Ltd. in Melbourne, said by phone. “If we see a similar figure in the EIA data that will push prices above $50. The big question is whether this pullback in stockpiles is because of the disruptions from the Canadian wildfires, or does it have more to do with the seasonal pickup.”
West Texas Intermediate for July delivery rose as much as 73 cents to $49.35 a barrel on the New York Mercantile Exchange and was at $49.24 at 1:20 p.m. Hong Kong time. The contract gained 54 cents to $48.62 on Tuesday. Total volume traded was about 42 percent below the 100-day average.
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Brent for July settlement increased as much as 65 cents, or 1.3 percent, to $49.26 a barrel on the London-based ICE Futures Europe exchange. The contract rose 26 cents to $48.61 on Tuesday. The global benchmark crude was at a discount of 7 cents to WTI.
Crude stockpiles at Cushing, Oklahoma, the delivery point for WTI and the biggest U.S. oil-storage hub, declined by 189,000 barrels last week, the API said Tuesday, according to people familiar with the numbers. Nationwide inventories probably dropped by 2 million barrels through May 20, according to the median estimate in a Bloomberg survey before the EIA report.
Oil-market news:
China’s Yantai Xinchao Industry Co. is pursuing oil acquisitions worth as much as $1 billion in the Permian Basin, according to the head of the company’s U.S. subsidiary. Norway’s government, which has called for greater competition in the country’s oil industry, wants Statoil ASA and Lundin Petroleum AB to remain rivals after the two companies deepened ties this month. Energy companies led gains on the MSCI Asia Pacific Index.
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