Oil’s slide below $45 a barrel stalled as investors weigh a forecast decline in U.S. crude stockpiles against a revival in output from Libya, which is exempt from the OPEC-led output cuts.
Futures were unchanged in New York after falling 1.2 percent Monday. U.S. inventories probably shrank by 1.2 million barrels last week. Libya is pumping the most oil in four years after a deal with Wintershall AG enabled at least two fields to resume production.
Oil slid below $45 a barrel to the lowest close in seven months amid concerns that rising U.S. supplies will offset output cuts by the Organization of Petroleum Exporting Countries and allies including Russia. Traders are storing more crude at sea amid swelling production in the Atlantic region, a sign the market is far from rebalancing.
“High inventories and production will be a significant headwind on any sustainable rally for oil,” said David Lennox, a resource analyst at Fat Prophets in Sydney. “Prices near $45 may help to wind back U.S. output.”
West Texas Intermediate for July delivery, which expires Tuesday, traded at $44.20 a barrel on the New York Mercantile Exchange. Total volume traded was about 5 percent below the 100-day average. The more-active August contract rose 2 cents to $44.45 at 1:35 p.m. in Hong Kong.
For more on how tanker storage is undermining OPEC’s cuts, click here
Brent for August settlement climbed 4 cents to $46.95 a barrel on the London-based ICE Futures Europe exchange. Prices fell 1 percent to $46.91 on Monday. The global benchmark crude traded at a premium of $2.52 to August WTI.
U.S. crude stockpiles remain more than 100 million barrels above the five-year average, according to data from the EIA. American production has climbed to 9.33 million barrels a day through June 9, near the highest since August 2015.
Oil-market news:
Libyan is pumping about 900,000 barrels a day, according to a person with direct knowledge of the matter, who asked not to be identified for lack of authority to speak to the media. Oil stored in tankers reached a 2017 high of 111.9 million barrels earlier this month, according to Paris-based tracking company Kpler SAS. There were 5,946 drilled-but-uncompleted wells in U.S. oilfields at the end of May, the most in at least three years, according to EIA estimates.
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