Oil held gains near $60 a barrel as a drop in U.S. crude stockpiles bolstered speculation that the country’s surplus is easing.
Futures were little changed in New York after rising 0.8 percent Tuesday. Crude inventories shrank by 2.9 million barrels in the week ended June 12, the industry-funded American Petroleum Institute was said to have reported. Supplies fell for a seventh week, a Bloomberg survey showed before Energy Information Administration data Wednesday.
Oil is trading close to four-month highs as declining U.S. stockpiles and a slowdown in drilling countered signs that producers elsewhere are pumping more. Libya may double its output by next month as the OPEC member seeks to reopen pipelines feeding export terminals, according to National Oil Corp.
“It seems the market is content to hold at these levels as long as the inventory numbers get chipped away,” Ric Spooner, a chief analyst at CMC Markets in Sydney, said by phone. “The market has rallied on the basis that we’re going to see a production cut, but it hasn’t be forthcoming yet.”
West Texas Intermediate for July delivery was at $60.05 a barrel in electronic trading on the New York Mercantile Exchange, up 8 cents, at 12:13 p.m. Singapore time. The contract climbed 45 cents to $59.97 on Tuesday. Total volume was about 58 percent below the 100-day average. Prices have increased 13 percent this year.
Brent for August settlement was 5 cents higher at $63.75 a barrel on the London-based ICE Futures Europe exchange. It slid 25 cents to $63.70 on Tuesday. The European benchmark crude traded at a premium of $3.24 to WTI for the same month.
Crude inventories in the U.S., the world’s biggest oil consumer, probably dropped by 1.8 million barrels last week, according to the median estimate in the Bloomberg survey of 10 analysts. Supplies were at 470.6 million through June 5, more than 90 million above the five-year average for this time of the year, data from the Energy Department’s statistical arm showed.
Stockpiles at Cushing, Oklahoma, the delivery point for WTI contracts and the largest U.S. oil-storage hub, expanded by 329,000 barrels last week, the API in Washington reported Tuesday, according to a person familiar with the figures.
Libya may produce 800,000 barrels a day by July, Mohamed Elharari, a spokesman at state-run National Oil, told Libya News Agency on Tuesday. The country, which holds Africa’s biggest crude reserves, is pumping between 400,000 and 460,000 barrels a day, Chairman Mustafa Sanalla said in an interview at the World National Oil Companies Congress in London.
The Organization of Petroleum Exporting Countries, whose 12 members supply about 40 percent of the world’s oil, maintained its output quota of 30 million barrels a day at a June 5 meeting as it sought to defend market share against higher-cost producers. The group has exceeded its target the past year, data compiled by Bloomberg showed.
The oil market will stabilize by the end of 2015, predicted Venezuela’s Oil Minister Asdrubal Chavez. The OPEC member will continue to support a “fair oil price,” he said at a Latin American Petroleum Show event in Maracaibo.