Futures added 0.3 percent in New York after dropping 0.8 percent the previous two sessions. U.S. inventories slid by 7.8 million barrels last week, the American Petroleum Institute was said to report Tuesday, while a Bloomberg survey also forecast a decline. The Energy Information Administration marginally boosted its estimates for American production in 2017 and 2018. “The recovery this morning is most likely in anticipation of a sixth inventory decline in crude oil this afternoon” when the EIA releases its weekly stockpiles report, said Ole Sloth Hansen, head of commodity strategy at Saxo Bank A/S in Copenhagen. Gains will be capped by a stronger dollar, he said. Click Read More below for additional detail.
Oil investors turned bearish at the fastest pace in more than a year as they lost confidence that OPEC will reach a deal with other producers to limit supply at a gathering this week in Algiers.
Money managers increased bets on falling prices by half as the Organization of Petroleum Exporting Countries kept pumping at a record rate before the meeting. Prices rose as high as $47.62 a barrel this month as OPEC officials conducted meetings from Vienna to Paris to Moscow in attempts to reach consensus. Oil tumbled on Sept. 23 after Saudi Arabia was said to dismiss prospects for an output agreement.
“The rhetoric around the meeting is ringing hollow,” said John Kilduff, a partner at Again Capital LLC, a New York hedge fund focused on energy. “What they say and do are completely different since they continue to increase production.”
WTI futures declined 3.3 percent to $43.44 a barrel in the report week. Crude was trading at $44.94, up 1 percent, as of 12:04 p.m. London time on Monday.
More than 800,000 barrels a day of additional crude is pouring into the global market this month as Russian output climbs while Libya and Nigeria restore disrupted supplies, according to their ministry officials. The global oil-market surplus, once projected to wind down this year, will drag into late 2017, the International Energy Agency said on Sept. 13.
more at: http://www.bloomberg.com/news/articles/2016-09-25/oil-speculators-abandon-hope-in-opec-s-ability-to-support-prices