Oil rose above $50 a barrel in New York before data forecast to show a third weekly drop in U.S. crude inventories, while Saudi Arabia said it will sell customers considerably less crude than they’re asking for.
Futures advanced 1.4 percent after rebounding 0.6 percent on Monday from a weekly loss. Crude stockpiles probably slid by 750,000 barrels last week, a Bloomberg survey showed before an Energy Information Administration report due Thursday.
Oil last week fell the most since May on speculation rising global output may offset supply curbs led by members of the Organization of Petroleum Exporting Countries. The output-cuts deal is set to expire at the end of March and the group is likely to discuss an extension at its next meeting on Nov. 30. Its de facto leader, Saudi Arabia, said state oil company Saudi Aramco will ship 560,000 barrels a day less than customers are requesting in November.
“In their attempt to reassure the market of their determination to bring global stocks down, the company has decided to take the unusual step of going public with their November export plans,” said Tamas Varga, an analyst at PVM Oil Associates Ltd. in London. “The kingdom’s intention is clear. Concrete and practical steps are being taken.”
West Texas Intermediate for November delivery was at $50.28 a barrel on the New York Mercantile Exchange, up 70 cents, at 8:39 a.m. local time. Total volume traded was about 24 percent below the 100-day average. Prices climbed 29 cents to $49.58 on Monday after falling 4.6 percent last week.
Brent for December settlement advanced 57 cents to $56.36 a barrel on the London-based ICE Futures Europe exchange, and traded at a $5.75 premium to WTI for the same month. The global benchmark crude rose 17 cents to $55.79 on Monday after falling 3.3 percent last week.
Saudi Aramco plans to supply 7.15 million barrels a day “despite very strong demand” that exceeds 7.7 million barrels a day, the Saudi Energy Ministry said in a statement.
Iraq and Iran boosted crude exports in September, taking advantage of a slower pace of shipments from Saudi Arabia to win buyers in key markets like China and the U.S. Crude in floating storage is declining, demonstrating that the market is rebalancing, OPEC Secretary-General Mohammad Barkindo said Monday. Barkindo also said North American shale producers should share responsibility in sustaining the rebalancing in the medium and long term. An estimated 1.49 million barrels a day, or 85 percent of oil production in the Gulf of Mexico, remains halted after Tropical Storm Nate, according to the Bureau of Safety and Environmental Enforcement. Iraq’s Oil Minister Jabbar al-Luaibi ordered repairs to the country’s northern export pipeline to Turkey. The link was disrupted during fighting against Islamic State.
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