Seoul - Oil traded near its lowest close in a month as
investors weighed the outlook for shrinking US crude stockpiles against
forecasts for increasing fuel supplies.
Futures lost as much as 0.5 percent New York after dropping
1 percent Monday. US gasoline and distillate inventories probably climbed last
week, according to a Bloomberg survey before a report from the Energy
Information Administration on Wednesday.
Meanwhile, nationwide crude stockpiles are forecast to have
decreased for a fourth week from a record. The industry-funded American
Petroleum Institute will release its supply data on Tuesday.
Oil has fallen the past two weeks on concerns increasing US
crude production will offset efforts by the Organization of Petroleum Exporting
Countries and its allies to ease a global supply glut.
While Fereidun Fesharaki, the head of industry consultant
FGE, says OPEC is certain to extend output cuts when its ministers meet later
in May, industry data showed American rigs targeting crude climbed to the
highest level in two years.
“Rising oil-product stockpiles in the US may simply mean
that refineries are building up supplies prior to the OPEC-led group’s
extension of output cuts, but the market’s still concerned because they are
abnormally expanding,” Hong Sung Ki, a commodities analyst at Samsung Futures
Inc., said by phone in Seoul.
“We are almost certain at this point that OPEC and its
allies will extend the deal beyond June.”
West Texas Intermediate for June delivery dropped 21 cents
to $48.63 a barrel on the New York Mercantile Exchange at 3 p.m. in Singapore.
Futures fell 49 cents to $48.84 on Monday, the lowest settlement since March
28. Total volume traded was about 37 percent below the 100-day average.
US Fuels
Brent for July settlement fell 17 cents to $51.35 a barrel
on the London-based ICE Futures Europe exchange. The contract dropped 53 cents
to settle at $51.52 a barrel on Monday.
The global benchmark crude traded at a $2.39 premium to July
WTI.
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Supplies of gasoline probably rose 1 million barrels to 242
million and inventories of distillate fuel, a category that includes diesel and
heating oil, surged 1.5 million barrels to 152.4 million last week, according
to a Bloomberg survey of eight analysts.
Nationwide crude stockpiles are forecast to have dropped by
3.25 million to 525.5 million barrels in the week ended April 28.
Oil-market news
Oil prices will reach $60 a barrel by the year-end amid
strong demand and trade in the $60s in 2018 with little downside, Amrita Sen,
Energy Aspects chief oil analyst, said at the Argus conference in Calgary. The
US is in the position to be energy-dominant, not just independent, thanks to
fracking and plans to loosen drilling regulations, the nation’s Interior
Secretary Ryan Zinke said Monday.
BLOOMBERG