Oil traded near the highest price in almost two weeks as the US economy expanded at the fastest pace in more than a decade, signalling fuel demand may increase in the world’s biggest consumer.
West Texas Intermediate futures were down 0.6% in New York, paring a 3.4% gain yesterday.
Gross domestic product rose at a 5% annual rate from July through September, the most since 2003, according to revised Commerce Department data.
US crude stockpiles probably shrank by 2.5 million barrels last week, a survey shows before a report from the Energy Information Administration.
Oil is heading for the biggest annual decline since 2008 amid a global glut exacerbated by the highest US output in more than three decades and as the Organization of Petroleum Exporting Countries resisted supply cuts to defend market share.
Iraq, OPEC’s second-largest producer, approved a spending plan for next year that’s smaller than the government expected.
“The big GDP figure gave us a pop,” Phil Flynn, a senior market analyst at Price Futures Group in Chicago, said today. “A holiday rally gave enough to forget about the glut.”
WTI for February delivery was at $56.79 a barrel in electronic trading on the New York Mercantile Exchange, down 33 cents, at 3:42 p.m. Singapore time.
The contract climbed $1.86 to $57.12 yesterday, the highest close since December 12.
The volume of all futures traded was more than nine times the 100-day average. Prices have dropped 42% this year.
Brent for February settlement slid 35 cents to $61.34 a barrel on the London-based ICE Futures Europe exchange.
The European benchmark crude traded at a premium of $4.50 to WTI.
US crude inventories probably fell to 377.4 million barrels in the week ended December 19, according to the median estimate in a survey of nine analysts.
Production accelerated to 9.14 million a day through December 12, the most in weekly data that started in January 1983.
OPEC, whose 12 members supply about 40% of the world’s oil, pumped 30.56 million barrels a day in November, a separate survey of companies, producers and analysts showed.
That exceeded their collective target of 30 million for a sixth straight month.
Iraq approved a budget of 123 trillion dinars ($103 billion) for 2015, Saad Al-Hadithi, a spokesman for the prime minister’s office, said yesterday.
It’s based on a $60-a-barrel price of oil and compares with a previously planned spending of 141 trillion dinars.