Oil traded near $57 a barrel as U.S. crude output climbed to a fresh record, offsetting a bigger-than-forecast drop in stockpiles.
Futures rose 0.3 percent in New York after falling 2.4 percent the previous two sessions. American production last week capped an eighth weekly gain to the highest in more than three decades, while crude stockpiles fell by 5.12 million barrels, according to government data. Ineos Group Ltd. shut a crude unit at its Grangemouth refinery in Scotland after the Forties Pipeline System in the North Sea supplying the plant was shut to repair a crack.
Oil is heading for a second yearly gain as the Organization of Petroleum Exporting Countries and its allies including Russia extend output cuts through the end of 2018. OPEC predicted global markets won’t rebalance until late next year after boosting forecasts for supplies from other rivals including the U.S., according to its monthly report on Wednesday.
“The concern is acceleration in production and the potential for further supply from the U.S.,” said Michael McCarthy, a chief strategist at CMC Markets in Sydney. “Even though prices have eased, they’re still elevated. OPEC cuts, U.S. output and when the market re-balances are the key themes for 2018.”
West Texas Intermediate for January delivery was at $56.78 a barrel on the New York Mercantile Exchange, up 18 cents, at 3:01 p.m. in Hong Kong. Total volume traded was about 32 percent below the 100-day average. Prices slid 54 cents to $56.60 on Wednesday to close at the lowest in a week.
Brent for February settlement increased 42 cents, or 0.7 percent, to $62.86 a barrel on the London-based ICE Futures Europe exchange after falling 1.4 percent on Wednesday. The global benchmark crude traded at a premium of $6.10 to February WTI.
U.S. crude production rose to 9.78 million barrels a day last week, the highest level in weekly data compiled by the Energy Information Administration since 1983. Output is forecast to average 10.02 million barrels a day next year, above the record 9.6 million produced in 1970, the EIA said Tuesday in its monthly Short-Term Energy Outlook.
OPEC increased its outlook for supply from outside the group by 300,000 barrels a day in 2018, according to its monthly report.