(Bloomberg) -- Oil pushed higher for the first time in four sessions amid expectation that a U.S. government report will show shrinking domestic crude stockpiles.
Futures rose 1.2 percent in New York on Tuesday. The industry-funded American Petroleum Institute was said to report U.S. crude inventories declined 2.03 million barrels last week. That’s close to the 2.1 million-barrel-drop seen in a Bloomberg survey ahead of Wednesday’s weekly Energy Information Administration report and would mark a second week of declines during the key summer driving season.
“I think we’ll see higher exports. What I anticipate is we’ll get close to 3 million barrels a day in exports and stay there until we get more capacity out of Corpus Christi,” said James Williams, president of London, Arkansas-based energy researcher WTRG Economics. “Unless we see some really big differences tomorrow, oil is still going to be trading on expectations of the OPEC meeting, which are going up and down every day.”
Traders are gauging U.S. stockpiles and production figures ahead of a key OPEC meeting later this month where the cartel and allied producers will discuss relaxing output caps. American drillers are pushing production toward the 11 million-barrel-a-day mark, depressing prices for domestic supplies.
WTI for July delivery traded at $65.33 a barrel at 4:43 p.m. after settling at $65.52 a barrel on the New York Mercantile Exchange.
Brent futures for August settlement rose 9 cents to end the session at $75.38 on the London-based ICE Futures Europe exchange. Brent traded at a $9.92 premium to WTI for the same month.
Begs for Exports
The price advantage for crude from U.S. wells “just begs for more exports” of U.S. crude, said Bob Yawger, director of futures at Mizuho Securities USA Inc. in New York.
The API also was said to report stockpiles at Cushing, Oklahoma -- the biggest U.S. storage hub -- fell 1.04 million barrels last week, while gasoline supplies rose 3.76 million barrels. A separate Bloomberg forecast showed Cushing inventories falling by an estimated 500,000 barrels.
Earlier, Brent traded lower for most of the session on reports that the U.S. government asked Saudi Arabia and some other OPEC producers to increase oil production by about 1 million barrels a day, according to people familiar with the matter.
“People are looking at the talk of an increase from OPEC and especially thinking that the barrels will tend to compete in the Atlantic market with Brent, so that’s pushing Brent down,” said Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Massachusetts.
Other oil-market news:
- Gasoline futures dropped 0.8 percent to settle at $2.1062 a gallon.
- Saudi Arabia raised pricing on key crude grades for buyers in Asia to the highest since 2014 as demand climbed in the kingdom’s biggest market.
- OPEC Secretary General Mohammad Barkindo agreed with the estimate of the current oil market situation, Russian Energy Minister Alexander Novak told reporters in Vienna.
- Oil demand is surging higher in 2018 and consumption in China is probably stronger than the market’s anticipating, Jeff Currie, head of commodities research at Goldman Sachs Group Inc., said at the S&P Global Platts Crude Oil summit in London.
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