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Oil Prices Trade Higher Amid Hopes for Decline in U.S. Stockpiles

Published 27/11/2018, 15:08
© Reuters.
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Investing.com - Oil prices traded higher on Tuesday as traders turned their attention to weekly data on U.S. crude stockpiles and forecasts for the first decline in inventories in 10 weeks.

New York-traded West Texas Intermediate crude futures gained 39 cents, or 0.76%, at $52.02 a barrel by 10:05 AM ET (15:05 GMT).

Meanwhile, Brent crude futures, the benchmark for oil prices outside the U.S., traded up 46 cents, or 0.76%, to $61.02.

The American Petroleum Institute is due to release its report for the week ended Nov. 23 at 4:30 PM ET (2130 GMT) while official government data will be released on Wednesday amid expectations for an inventory draw of 600,000 barrels. If confirmed, it would be the first decline in U.S. stockpiles in 10 weeks.

Limiting gains on Tuesday were continued worries over ever-increasing production levels. With Energy Information Administration data showing just last week that the U.S. output was at a record high of 11.7 million barrels per day (bpd), Saudi Arabia also raised oil production to an all-time high in November of nearly 11.3 million bpd an industry source told Reuters on Monday.

Those record levels come as OPEC prepares to meet in Vienna on Dec. 6 amid remarks that the cartel would seek an agreement to cut output given the sharp decline in oil prices.

Talk of a 1.4 million bpd reduction had been floated before U.S. President Donald Trump put pressure on his political ally Saudi Arabia, the de facto leader of OPEC.

A Bloomberg survey released Tuesday placed the average estimate of the size of the cut to be announced by OPEC and major allies led by Russia at 1.1 million bpd.

Notably, of the 36 analysts surveyed by the news agency, 12 of the 31 predicting a reduction said that Moscow would not participate.

In other energy trading, gasoline futures slipped 0.02% to $1.4226 a gallon by 10:07 AM ET (15:07 GMT), while heating oil advanced 0.48% to $1.8962 a gallon.

Lastly, natural gas futures traded down 3.26% to $4.159 per million British thermal units.

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