Crude declined, ending its longest winning streak this year amid speculation the U.S. glut will linger.
Futures fell in New York after rising 5.7 percent over five sessions. Inventories probably fell by 1.75 million barrels from a record high last week, according to a Bloomberg survey before a government report due on Wednesday. U.S. crude production, though, remains at its highest level since January 2016, the Energy Information Administration said last week. Additionally, state-run Saudi Aramco met contractual volumes for May to at least four Asian customers, said people who asked not to be identified because the information is confidential.
“The correction rally seems to have run its course,” said Gene McGillian, manager of market research for Tradition Energy in Stamford, Connecticut, in a phone interview. “We have signs of an overabundance of oil and rising U.S. production weighing on prices.”
Oil has rallied above $50 a barrel after some members of the Organization of Petroleum Exporting Countries voiced support for an extension of production cuts past June, offsetting rising U.S. output. The curbs have stabilized the market, according to Russia, which is among 11 other nations outside the group that have joined in the pact aimed at easing a global glut.
West Texas Intermediate for May delivery slipped 25 cents, or 0.5 percent, to $52.82 a barrel at 10:19 a.m. on the New York Mercantile Exchange. Total volume traded was about 12 percent below the 100-day average. The contract rose 1.6 percent to $53.08 on Monday, the highest close since March 7.
Brent for June settlement fell 13 cents at $55.85 a barrel on the London-based ICE Futures Europe exchange, after rising 74 cents to $55.98 on Monday. The global benchmark crude was at a $2.48 premium to June WTI.
“You’ve already built in a lot of friendly news,” said Bill O’Grady, chief market strategist at Confluence Investment Management in St. Louis, in a telephone interview. “We’re getting close to the the end of seasonal crude builds, may already have ended, but its already been factored in the price.”