Futures added 0.7 percent in New York after advancing 3.3 percent the previous two sessions. The global economic recovery has gained traction and oil de-stocking gathered pace in recent months, Barkindo said Tuesday. Producers in the U.S. Gulf have cut output by a million barrels a day, or 59 percent, because of Tropical Storm Nate, the Bureau of Safety & Environmental Enforcement said. Oil has inched higher in the past few days -- following the biggest weekly loss since May -- on signs of tighter supply. U.S. crude stockpiles probably fell by 2.4 million barrels last week, according to a Bloomberg survey before an Energy Information Administration report Thursday. Barkindo, speaking in New Delhi, said the Organization of Petroleum Exporting Countries had boosted oil-demand estimates for this year and next. “OPEC is talking to a market which is currently prepared to listen, given the visible improvements seen during the past few months,” said Ole Sloth Hansen, head of commodity strategy at Saxo Bank A/S. Click Read More below for more of the story.
Futures slipped 0.6 percent. The agency boosted estimates for global demand growth but said that stockpiles don’t appear to be declining as quickly as expected as rising OPEC production threatens the rebalancing process. While U.S. crude inventories fell by 7.56 million barrels last week — the most since September — the IEA said total fuel stocks in developed countries appear to have grown in the first half.
Oil remains in a bear market on concern rising global supply will offset curbs by the Organization of Petroleum Exporting Countries and its partners including Russia. OPEC’s first assessment of world markets in 2018 suggested that its current output of 32.6 million barrels a day — swollen by a recovery in Libya and Nigeria that are exempt from the cuts — will be too high.
“Given how the rebalancing process appears to be taking its time, it will be difficult to avoid having the discussion with Libya and Nigeria of eventually capping their output, provided of course the gains in the two countries are sustained,” said Harry Tchilinguirian, head of commodity markets strategy at BNP Paribas SA in London.
West Texas Intermediate for August delivery fell 27 cents to $45.22 a barrel on the New York Mercantile Exchange at 11:51 a.m. in London. Total volume traded was about 4 percent above the 100-day average. Prices gained 45 cents to $45.49 on Wednesday.
Brent for September settlement dropped 32 cents to $47.42 a barrel on the London-based ICE Futures Europe exchange. Prices advanced 22 cents, or 0.5 percent, to close at $47.74 on Wednesday. The global benchmark crude traded at a premium of $2.02 to September WTI.