Oil traded near the lowest close in more than a month before weekly U.S. government data forecast to show crude stockpiles expanded, exacerbating a glut.
Futures rose 0.5 percent in New York after slumping 3.8 percent Monday, the most since Sept. 23. Crude inventories rose by 1.5 million barrels last week, according to a Bloomberg survey before an Energy Information Administration report Wednesday. Gasoline prices jumped after an explosion and fire shut the mainlines of Colonial Pipeline Co., the biggest U.S. pipeline for the fuel.
Oil has declined more than 5.5 percent since the Organization of Petroleum Exporting Countries failed Friday to agree on country quotas as part of implementing the group’s output cut agreement. The probability of OPEC reaching a deal at the official meeting Nov. 30 is low due to growing discord within the group, according to Goldman Sachs Group Inc.
“Investor skepticism to a supply deal is building,” said David Lennox, a resources analyst at Fat Prophets in Sydney. “The initial shock if there is no agreement at the official meeting might see prices drop below $40 a barrel, but we don’t think it’ll stay at that level for any length of time.”
West Texas Intermediate for December delivery was at $47.07 a barrel on the New York Mercantile Exchange, up 21 cents, at 1:47 p.m. in Hong Kong. The contract slid $1.84 to $46.86 a barrel on Monday. Prices lost 2.9 percent in October, the first monthly decline since July.
December gasoline futures on Nymex rose as much as 21.56 cents, or 15 percent, to $1.6351 a gallon after Monday’s settlement at $1.4195.
U.S. Stockpiles
Brent for January settlement was up 65 cents at $48.95 a barrel on the London-based ICE Futures Europe exchange. The December contract expired Monday after falling 2.8 percent to $48.30. Front-month prices slid 1.6 percent in October. The global benchmark was at a premium of $1.24 to WTI for January.
For a story on the positions of OPEC members on the output deal, click here.
U.S. crude stockpiles probably increased for the first time in three weeks, according to the Bloomberg survey before the EIA report. Supplies are at the highest seasonal level in more than three decades, according to weekly government data compiled since 1982.
Colonial, which carries refined products to New York Harbor from Houston, shut the lines for the second time in two months after a spill on Sept. 9 knocked them offline for 12 days, cutting supplies to 50 million Americans in the Southeast. Alabama Governor Robert Bentley said the incident in Shelby County Monday was about a mile west of the September spill.
Oil-market news:
OPEC and other major oil producers are “on course” to deliver a deal this month that will temper the global oversupply, according to OPEC Secretary-General Mohammed Barkindo. Russia’s monthly output in October is set to reach its highest level in almost 30 years, according to preliminary government data.
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