(Bloomberg) -- Oil edged higher after an industry report showed U.S. crude stockpiles and supplies at the nation’s largest storage hub both declined.
Futures in New York climbed from the settlement Tuesday after the American Petroleum Institute was said to have reported U.S. crude inventories tumbled 1.05 million barrels last week. Supplies at the Cushing, Oklahoma hub decreased for the first time since early March.
“It shows an underlying bullish U.S. supply-demand balance, despite the record production,” said Kyle Cooper, director of research at IAF Advisors in Houston. “It shows a bullish supply-demand balance globally for petroleum and that typically tends to support the market.”
Prices also gained during the session amid optimism that a Friday producer meeting may lead to talks on an OPEC deal extension, in the midst of comments from Kuwait that producers will discuss prolonging their deal to reduce output into 2019.
Energy ministers from Saudi Arabia, Russia, the United Arab Emirates, Oman, Algeria, Kuwait and others will attend a meeting Friday of a joint ministerial monitoring committee in Jeddah, according to a person familiar with the matter.
The confab comes at a time when the U.S. is pumping oil at unprecedented levels. Production from the world’s most prolific crude play, the Permian Basin, is expected to set new records as drillers keep adding more wells.
Chatter on Cuts
“You’re also getting chatter that the OPEC members are considering extending the cuts. You should start to see some support soon,” said Gene McGillian, a market research manager at Tradition Energy in Stamford, Connecticut.
West Texas Intermediate for May delivery traded at $66.65 a barrel at 4:39 p.m. after settling at $66.52 a barrel on the New York Mercantile Exchange. Total volume traded Tuesday was about 12 percent above the 100-day average.
Brent for June settlement rose 16 cents to end the session at $71.58 a barrel on the London-based ICE Futures Europe exchange. The global benchmark crude traded at a $5.07 premium to June WTI.
Yuan-denominated futures for September delivery slid 0.7 percent to 425.1 yuan a barrel on the Shanghai International Energy Exchange.
OPEC and allied producers including Russia will consider maintaining their production limits beyond the end of the year when they meet in June to assess the market, Kuwait Oil Minister Bakheet Al-Rashidi said.
The API was also said to report that Cushing inventories fell 1.02 million barrels, while both gasoline and distillate supplies also shrank.
In the U.S., crude stockpiles probably rose by 650,000 barrels last week, according to the median estimate in the Bloomberg survey before government data is released on Wednesday. Stocks in Cushing, Oklahoma, the delivery point for WTI futures, probably shrank by 650,000 barrels last week after rising for five weeks through April 6.
Other oil-market news:
- Gasoline futures increased 0.1 percent to settle at $2.0412 a gallon on Tuesday.
- Oil prices are near levels that could prove harmful to OPEC and other producers as global markets tighten and a “major” supply crisis looms in Venezuela, the head of the International Energy Agency said.
- Most oil industry participants surveyed see oil prices between $60 and $70 a barrel in 2018, consultant Wood Mackenzie Ltd. said in a report.
©2018 Bloomberg L.P.