Oil traded near a three-week high after a supply disruption in Libya and as investors await U.S. inventory data.
Futures in New York slid 0.3 percent after closing at the highest since Feb. 5 on Monday as crude exports from a key Libyan terminal were disrupted. The focus now shifts to U.S. stockpiles, which are forecast to have risen last week. While they increased in three of the past four weeks, the pace of gains slowed, allaying fears that American supply will undermine OPEC’s output curbs.
The Organization of Petroleum Exporting Countries and its allies are committed to erasing a supply glut as they deliver deeper production cuts than promised, United Arab Emirates Energy Minister Suhail Al Mazrouei said Tuesday. Still, oil is struggling to regain the highs of January as the U.S. pumps record volumes.
“Currently we are in a wait and see mode for the upcoming inventory data,” said Giovanni Staunovo, an analyst at UBS Group AG in Zurich. “With crude stockpiles potentially building again, oil remains vulnerable to another correction.”
West Texas Intermediate for April delivery fell 21 cents to $63.70 a barrel at 7:20 a.m. on the New York Mercantile Exchange. Prices are set for the first monthly loss since August. Total volume traded was about 44 percent below the 100-day average.
Brent for April settlement, which expires Wednesday, lost 13 cents to $67.37 a barrel on the London-based ICE Futures Europe exchange. The more-active May contract was down 12 cents at $67.17. The global benchmark crude traded at a $3.67 premium to WTI.
U.S. inventories probably rose by 2 million barrels last week, following a surprise drop in the previous week, according to a Bloomberg survey before Energy Information Administration data due Wednesday. The number of rigs drilling for oil in the U.S. has risen for five consecutive weeks to the highest in almost three years, Baker Hughes data show.
Other oil-market news:
Iraq exported 3.5 million barrels a day from the country’s south in December, Abdul Mahdy Al-Ameedi, the Oil Ministry’s director-general for upstream oil contracts, said in Berlin.
Electric vehicle fervor is inspiring bleak gasoline views with the Boston Consulting Group forecasting a drop of as much as 35 percent in U.S. demand for the fuel by 2035 compared with 2015.
Mercuria Energy Group Ltd. is leading a group of investors seeking to replace Rosneft PJSC’s $1.5 billion loan to Venezuela’s state-owned oil company, said a person familiar with the matter.