Oil is heading for a second weekly loss as investors turn their attention to expanding U.S. oil production and gasoline stockpiles after OPEC last month agreed to extend supply cuts.
Futures climbed 0.7 percent in New York, paring this week’s loss to 2.1 percent. U.S. crude output increased to a record last week, while motor fuel inventories rose more than double analysts’ forecasts, government data showed Wednesday. Kuwait sees the oil market re-balancing by the third quarter of 2018, state-run Kuna news agency said, citing the nation’s oil minister.
Oil has averaged about $54 a barrel this quarter, the highest in more than two years as the Organization of Petroleum Exporting Countries and its allies agreed to extend output curbs until the end of 2018. Chevron Corp. will ramp up investment in the U.S. Permian Basin and other shale fields next year while reducing spending elsewhere, according to a statement Thursday.
“The dominant theme for 2017 has been the magnitude of shale productivity and gains,” said Christyan Malek, an analyst at JPMorgan Chase & Co.
West Texas Intermediate for January delivery was at $57.15 a barrel on the New York Mercantile Exchange, up 46 cents, at 10:06 a.m. in London. Total volume traded was about 33 percent below the 100-day average. Prices gained 73 cents, or 1.3 percent, to $56.69 on Thursday.
Brent for February settlement rose 55 cents to $62.75 a barrel on the London-based ICE Futures Europe exchange after climbing 1.6 percent on Thursday. Prices are down 1.6 percent this week. The global benchmark traded at a premium of $5.56 to February WTI.
U.S. crude production expanded for a seventh week to 9.7 million barrels a day, the highest level in weekly data compiled by the Energy Information Administration since 1983. Gasoline inventories rose by 6.78 million barrels last week, the biggest gain since January.
Oil-market news:
China’s crude oil imports rebounded from a one-year low to near a record amid signs the nation’s commercial stockpiles shrank by the most in almost eight years. Net fuel exports jumped to a record. BP Plc will focus on drilling new wells near its existing offshore platforms in the Gulf of Mexico and the North Sea next year, part of a plan to only build projects that meet its targeted returns at $50 a barrel. With Sinopec’s recent legal action representing “a watershed moment” in the Venezuelan debt crisis, the risk of potential default is “happening sooner rather than later” is increasing substantially, FGE wrote in a note.
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