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Oil Prices Stage Recovery Ahead of Inventory Data

Published 30/05/2018, 15:57
© Reuters.  Oil prices jump 1% as West Texas recovers part of a $5 decline
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Investing.com - Oil prices rebounded ahead of inventory data to be released later on Wednesday and Thursday, after recent concerns over possible increases in output by the Organization of the Petroleum Exporting Countries (OPEC) and Russia sent the U.S. benchmark tumbling for over a week.

New York-traded West Texas Intermediate crude futures jumped $1.19, or about 1.8%, to $67.92 a barrel by 10:49AM ET (14:49GMT).

Meanwhile, Brent crude futures, the benchmark for oil prices outside the U.S., was last up $1.63, or 2.2%, to $77.13.

Despite Wednesday’s recovery, the U.S. benchmark was still off more than $5 on reports last week that OPEC and Russia were considering easing production curbs in order to meet shortfalls from Iran and Venezuela.

Russian energy minister Alexander Novak said Saturday that a return to oil production levels that were in place in October 2016, the baseline for the current deal to cut output, was one of the options being discussed.

OPEC and non-OPEC producers led by Moscow have been curbing output by about 1.8 million barrels per day (bpd) to prop up oil prices and reduce high global oil stocks. The pact began in January 2017 and is set to expire at the end of 2018.

Novak stipulated that any decision would be made at the meetings of OPEC and non-OPEC countries in Vienna on June 22-23.

With a strong rebound underway on Wednesday, investors turned their attention to fresh data on U.S. commercial crude inventories to gauge the strength of demand in the world’s largest oil consumer.

Industry group the American Petroleum Institute is due to release its weekly report at 4:30PM ET (2030GMT). Official data from the Energy Information Administration will be released Thursday, amid forecasts for an oil-stock gain of 2.2 million barrels.

Both reports come out one day later than usual because of the U.S. Memorial Day holiday on Monday.

In other energy trading, gasoline futures rose 1.3% to $2.1671 a gallon by 10:51AM ET (14:51GMT), while heating oil climbed 1.7% to $2.2180 a gallon.

Lastly, natural gas futures fell 0.4% to $2.892 per million British thermal units, extending losses seen in the previous session as weather forecasting models continued to predict that milder temperatures will cover the eastern part of the United States by the second week of June, potentially limiting early summer cooling demand for the fuel.

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