Oil rose to the highest in almost a month as investor focus returned to U.S. crude inventories after supply disruptions and optimism over OPEC’s output curbs drove a rally in the past week.
Futures added as much as 1.3 percent in New York, the sixth increase in seven days. U.S. stockpiles shrank by 1.83 million barrels last week, the industry-funded American Petroleum Institute was said to report, while government data due Wednesday is also forecast to show a decline. In the U.K. North Sea, production from the Buzzard field was halted unexpectedly, according to a person with knowledge of the matter.
Oil in the U.S. rose above $50 a barrel last week after some members of the Organization of Petroleum Exporting Countries voiced support for an extension to a six-month deal to cut production past June. OPEC Secretary-General Mohammad Barkindo said he’s “cautiously optimistic that the market is already rebalancing.” As well as signs that U.S. stockpiles are finally beginning to fall, inventories in the Caribbean and crude stored at sea are also starting to drain.
“It is the narrative of falling oil inventories,” said Giovanni Staunovo, an analyst at UBS Group AG in Zurich. “There is evidence stockpiles are dropping elsewhere around the world. Once U.S. data starts showing the decline as well, it gives further support to the oil-market rebalancing story and that the OPEC deal is working.”
West Texas Intermediate for May delivery rose as much as 68 cents to $51.71 a barrel on the New York Mercantile Exchange and was at $51.51 as of 11:28 a.m. London time. Total volume traded was about 7 percent above the 100-day average. The contract closed at $51.03 on Tuesday, the highest settlement since March 7. Prices slid below $50 early last month for the first time since December.
Brent for June settlement advanced as much as 74 cents, or 1.4 percent, to $54.91 a barrel on the London-based ICE Futures Europe exchange after climbing 2 percent on Tuesday. The global benchmark traded at a premium of $2.69 to June WTI.
U.S. crude inventories probably dropped by 150,000 barrels to 533.8 million barrels in the week ended March 31, according to a Bloomberg survey before Wednesday’s Energy Information Administration report. Nationwide stockpiles have expanded by about 55 million barrels since the start of this year.