Oil extended losses as rising crude stockpiles kept supplies at the highest level in more than eight decades before major producers meet in Doha to discuss freezing output.
Futures lost as much as 1.5 percent in New York after falling 1 percent Wednesday. Inventories rose by 6.6 million barrels last week to 536.5 million, the most since 1930, according to government data. The jump was higher than all nine estimates in a Bloomberg survey. Suppliers meeting April 17 should agree on steps to ease a glut of 2 million barrels a day, said Iraq’s Deputy Oil Minister Fayyad Al-Nima, without saying if his nation will cap output.
“Doha is the key event hanging over the market,” Michael McCarthy, a chief strategist at CMC Markets in Sydney, said by phone. “Even if there is an agreement, there are doubts about how it will be implemented. The potential for sustained price gains are limited while the inventory remains so high.”
Oil has rebounded after falling to the lowest in more than 12 years amid signs a global glut will ease as U.S. production declines. While forty analysts and traders surveyed by Bloomberg News were evenly split over whether talks in the Qatari capital will succeed in capping output, a majority of those who predicted a deal said it would have no impact on actual flows of crude.
West Texas Intermediate for May delivery fell as much as 63 cents to $41.13 a barrel on the New York Mercantile Exchange and was at $41.21 at 1:05 p.m. Hong Kong time. The contract dropped 41 cents to $41.76 on Wednesday after advancing 13 percent the previous three sessions. Total volume traded was about 3 percent above the 100-day average.
U.S. Output
Brent for June settlement lost as much as 68 cents, or 1.5 percent, to $43.50 a barrel on the London-based ICE Futures Europe exchange. The contract fell 51 cents to $44.18 on Wednesday. The global benchmark was at a premium of $1.15 to WTI for June.
U.S. crude production slipped by 31,000 barrels a day to 8.98 million barrels through April 8, the Energy Information Administration reported Wednesday. That’s the first time below 9 million a day since October 2014. Stockpiles at Cushing, Oklahoma, the delivery point for WTI and the nation’s biggest oil-storage hub, dropped by 1.77 million barrels.
Output freeze and oil-market news:
The Organization of Petroleum Exporting Countries may deepen cuts to its forecast for global oil demand growth due to slowing economic expansion in emerging markets, warmer weather and the removal of fuel subsidies. Iraq doesn’t want to announce its position on the freeze proposal before the meeting in Doha, Deputy Oil Minister Al-Nima said by phone. Saudi Arabia has said it will agree to a freeze only if it’s joined by other suppliers including Iran, while Kuwait said a deal can be done without Tehran’s support.
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