Futures gained as much as 1.3 percent in New York after falling 1.2 percent on Tuesday. Inventories dropped by 5.79 million barrels last week, the American Petroleum Institute was said to report. Government data Wednesday will show a 2 million barrel decline, according to a Bloomberg survey. The Energy Information Administration boosted its estimate for average U.S. output this year to 9.31 million barrels a day, up from 9.22 million a day projected in April. “Is the oil inventory overhang being reduced at a faster pace due to the cuts? That dynamic will be a major force at play for the next OPEC meeting in two weeks time,” said Giovanni Staunovo, an analyst at UBS Group AG in Zurich. “In the U.S., considering the rigs added over the last six months, a supply response will come in the second half of the year.” click Read More below for additional detail
Futures dropped 1.6 percent after IEA Executive Director Fatih Birol said that higher oil prices will trigger a “significant” increase in U.S. shale output as OPEC and other producers rein in supply. A day earlier, OPEC’s biggest exporter, Saudi Arabia, said deeper-than-planned production cuts and robust demand were helping the market re-balance.
West Texas Intermediate for February delivery slid 83 cents to $51.65 a barrel on the New York Mercantile Exchange at 10:16 a.m. London time. Total volume traded was about 8 percent below the 100-day average. The contract increased 11 cents to $52.48 on Tuesday. There was no settlement Monday because of a U.S. public holiday. Prices have averaged about $52 since the start of December.
Brent for March settlement declined 86 cents to $54.61 a barrel on the London-based ICE Futures Europe exchange, trading at a $2.13 premium to WTI for the same month. The global benchmark crude lost 39 cents to $55.47 on Tuesday.
“U.S. shale-oil production will definitely react strongly,” the IEA’s Birol said Wednesday in a Bloomberg Television interview in Davos, Switzerland. At $56 to $57 a barrel, “a lot of shale plays in the United States would make perfect sense to produce.”
U.S. crude stockpiles dropped by 1 million barrels last week, according to a Bloomberg survey before an Energy Information Administration report on Thursday.
Stockpiles are at 483.1 million barrels, the highest seasonal level in more than three decades, according to weekly data compiled by the EIA since 1982. Inventories at Cushing, Oklahoma, the delivery point for WTI and the nation’s biggest oil-storage hub, probably fell by 500,000 barrels last week, according to the Bloomberg survey.
more at: https://www.bloomberg.com/news/articles/2017-01-17/oil-holds-above-52-a-barrel-as-u-s-stockpiles-seen-sliding