Oil held losses near $36 a barrel as US industry data showed crude stockpiles expanded amid a global glut.
Futures were little changed in New York after falling 3.7 per cent Tuesday, the first decline in three days. Inventories climbed by 4.4 million barrels last week, the industry-funded American Petroleum Institute was said to report. Government data Wednesday is forecast to also show supplies increased, keeping stockpiles at the highest level in more than eight decades.
“There are still concerns about supply,” David Lennox, an analyst at Fat Prophets in Sydney, said by phone. “There is a surplus of oil and uncertainty about whether an output freeze can be agreed. Headwinds still remain and any rally is going to be somewhat capped.”
Oil has trimmed its loss this year to 1.5 per cent, climbing back after falling to a 12-year low last month on speculation a worldwide surplus will be prolonged amid brimming US supplies and the outlook for a boost in exports from Iran after the removal of sanctions. Recent talks among producers from Saudi Arabia to Russia about freezing output has helped boost prices, said Nigerian minister of state for Petroleum Resources Emmanuel Ibe Kachikwu.
West Texas Intermediate for April delivery was at $36.49 a barrel on the New York Mercantile Exchange, down 1 cent, at 12.20pm Hong Kong time. The contract fell $1.40 to $36.50 on Tuesday. Total volume traded was about 12 per cent below the 100-day average.
Brent for May settlement was 2 cents lower at $39.63 a barrel on the London-based ICE Futures Europe exchange. The contract decreased $1.19, or 2.9 per cent, to $39.65 a barrel Tuesday. The global benchmark crude traded at a premium of $1.22 to WTI for May.
Crude stockpiles at Cushing, Oklahoma, the delivery point for WTI, increased by 700,000 barrels last week, the API reported Tuesday, according to a person familiar with the figures. Stockpiles at the biggest US oil-storage hub have risen to a record for each of the last four weeks, according to data from the Energy Information Administration.
Nationwide inventories probably expanded by 3.5 million barrels, according to a Bloomberg survey before the next EIA report on Wednesday.
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