(Bloomberg) -- Oil edged lower in New York after an industry report signaled another gain in U.S. crude stockpiles, and as the spread of the coronavirus continued to cloud the prospects for an economic recovery.
Futures slipped to trade near $40 a barrel, but were still near a three-month high reached on Monday. The American Petroleum Institute reported crude inventories climbed by 1.75 million barrels last week, according to people familiar, which would be a third weekly increase if confirmed by government data Wednesday. Meanwhile, Anthony Fauci, the top U.S. infectious-disease expert, told Congress he was seeing a “disturbing surge” in new cases.
Oil has rallied since plummeting below zero in April as producers slashed crude output and regions across the world lifted lockdown restrictions. Some of the world’s top traders say demand has rebounded rapidly and OPEC+ laggards are starting to fall in line with supply cuts, but the virus threat remains acute.
While the API indicated a gain in nationwide stockpiles, it reported supplies at Cushing, Oklahoma, the delivery-point for U.S. futures, fell by 325,000 barrels, and gasoline inventories slid by 3.86 million barrels. The Energy Information Administration is expected to report crude stockpiles expanded by 1.5 million barrels, according to a Bloomberg survey.
Oil prices will need to remain at $60 a barrel for a sustained period for U.S. output to rise and for investment to return to the American shale patch, former BP (NYSE:BP) Plc Chief Executive Officer Bob Dudley, who is a member of Rosneft PJSC’s board, said on Tuesday. Almost a third of shale producers are technically insolvent with crude at $35, according to Deloitte LLP.
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