West Texas Intermediate for November delivery was at $47.27 a barrel on the New York Mercantile Exchange, down 55 cents at 8:21 a.m. in London. The contract rose 78 cents to $47.83 on Thursday, capping a 7.1 percent advance over two days. Total volume traded was about 11 percent below the 100-day average. Prices are down about 2.1 percent for the quarter. Brent for November settlement, which expires Friday, lost as much as 67 cents to $48.57 a barrel on the London-based ICE Futures Europe exchange. Prices are up 3.4 percent this month and down 2.1 percent for the quarter. The global benchmark crude was at a premium of $1.37 to WTI. The more-active December contract was 64 cents lower at $49.17 a barrel.
Oil prices rallied on Wednesday after an industry group reported a bigger-than-expected fall in U.S. oil stockpiles.
Late Tuesday, the American Petroleum Institute reported a 2.9 million barrel decrease in U.S. oil stocks for last week. The bigger-than-expected stockpile draw is a bullish signal for prices as it indicates healthy demand, analysts said.
The more closely watched data from the U.S. Energy Information Administration is due later Wednesday and analysts polled by The Wall Street Journal expect a decline of 1.3 million barrels.
Brent crude for August delivery rose 2.4% to $65.25 a barrel on London’s ICE Futures exchange. On the New York Mercantile Exchange, West Texas Intermediate futures for July were trading up 2% at $61.16 a barrel.
Analysts at Commerzbank said that the EIA data is “expected to show the seventh consecutive weekly decrease in U.S. crude oil stocks. If this turns out to be of a similarly high level to that reported by the API, it would lend support to oil prices.”
EIA’s report will also be scrutinized for its U.S. oil production estimate. Despite the significant drop in oil drilling rigs since last year, U.S. output has been stable at multi-decade highs of 9.6 million barrels a day.
“A renewed increase in production could give rise to disappointment and weigh on prices,” Commerzbank said.
Investors this week are also keeping a close watch on currency movements in the wake of the Greek debt negotiations and the coming U.S. Federal Reserve meeting.
Oil markets have been trading in a narrow range in recent weeks as opinion is divided about the extent U.S. shale-oil production has been hurt by falling oil prices, and whether oil demand is recovering fast enough to absorb the global oversupply.