25 October 2016, London — Oil edged up on Tuesday ahead of the release of U.S. crude inventory data, which in recent weeks has provided bullish surprises, but a flurry of top-level comments from OPEC members regarding chances of an output cut kept a lid on prices.
International Brent crude oil futures rose 35 cents to $51.81 per barrel at 0910 GMT from their last close.
U.S. West Texas Intermediate (WTI) crude futures turned positive, gaining 37 cents to $50.89 a barrel, after being negative throughout much of Asia trading.
The private American Petroleum Institute is due to publish its weekly crude stocks estimates on Tuesday at 2030 GMT, followed by the official Energy Information Administration data due on Wednesday.
“Crude oil does not want to drop the support until it sees if it can use the weekly U.S. statistics for another test of an upside break-out,” analysts at Petromatrix said in a note.
A Reuters poll showed that U.S. crude inventories were forecast to have risen last week by a likely 800,000 barrels to 469.5 million barrels. That came after a fall of more than 5 million barrels in the week to Oct. 14. [EIA/S]
Analysts said a leak in a pipeline leading out of the huge Cushing, Oklahoma, storage hub should lead to more build up of stocks in the coming weeks.
However, official inventory data has surprised by showing drawdowns in six of the seven past weeks, including the largest fall in stocks since 1999 when analysts foresaw a build. U.S. crude stocks are closely watched to gauge supply and demand in the world’s biggest crude consumer.
The verbal jockeying among OPEC’s 14 member states ahead of a Nov. 30 meeting that may lead to a cut in output continued this week, with Iraq emerging as a possible dissenter and non-member Russia as a potentially compliant collaborator.
Iraq, the second-largest producer in the Organization of the Petroleum Exporting Countries, said on Sunday it wanted to be exempt from output curbs as it needed more money to fight Islamic State militants.
Until there is more clarity on the planned cuts, which OPEC hopes will be coordinated with non-members such as Russia, analysts said oil prices would likely remain range-bound but volatile around current levels.
“Expect more of this choppy interplay until more concrete news emerges, as speculative buying runs into record producer selling of the futures contracts for hedging,” Jeffrey Halley, senior market analyst at brokerage OANDA in Singapore, said.
*Sabina Zawadzki; Henning Gloystein & Keith Wallis; editing – Susan Thomas – Reuters