Oil retreated from the highest level in more than four months as U.S. industry data showed crude stockpiles expanded before talks between major suppliers about freezing output.
Futures slid as much as 1.5 percent in New York after climbing 13 percent the previous three sessions. Inventories rose by 6.2 million barrels last week, the American Petroleum Institute was said to report. Government data Wednesday is forecast to show they gained 1 million barrels, keeping supplies near the highest since 1930. There’s hope a deal to cap production can be reached April 17 regardless of Iran’s position, said Kremlin press secretary Dmitry Peskov.
“At best, a freeze might reduce the risk of future supply increases offsetting the benefit of cuts to U.S. production,” Ric Spooner, a chief analyst at CMC Markets in Sydney, said by phone. “Inventories are still high and they are likely to cap any further price increases.”
Oil has rebounded after slumping to the lowest in more than 12 years amid signs a global glut will ease as U.S. production declines. Saudi Arabia 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. At least 16 nations will gather in Doha on Sunday to discuss keeping output at January levels.
West Texas Intermediate for May delivery fell as much as 63 cents to $41.54 a barrel on the New York Mercantile Exchange and was at $41.77 at 1:23 p.m. Hong Kong time. The contract gained $1.81 to $42.17 on Tuesday, the highest settlement since Nov. 25. Total volume traded was about 19 percent below the 100-day average.
Brent for June settlement lost as much as 45 cents, or 1 percent, to $44.24 a barrel on the London-based ICE Futures Europe exchange. The global benchmark crude was at a $1.26 premium to WTI for June.
Crude stockpiles at Cushing, Oklahoma, the delivery point for WTI and the biggest U.S. oil-storage, hub declined by 1.9 million barrels last week, the API said Tuesday, according to two people familiar the figures. Nationwide supplies are at 529.9 million barrels, the near the highest level since April 1930, according to data from the Energy Information Administration.
Freeze talk and oil-market news:
Russia’s Energy Minister Alexander Novak spoke to his Saudi Arabian counterpart Ali al-Naimi by phone on Tuesday to discuss prospects for a production freeze, a person with direct knowledge of the matter said. Schlumberger Ltd. will reduce activity in Venezuela after the world’s largest oil services provider failed to collect enough payments from the national oil company.