Oil prices dip ahead of U.S. crude stocks data

By Jane Chung

SEOUL (Reuters) – Oil prices inched lower on Tuesday ahead of inventories data, as the market weighed the impact of rising U.S. crude output versus last week’s deal between OPEC and other crude producers to extend output curbs.

International benchmark futures were trading down 10 cents, or 0.2 percent, at $62.35 per barrel by 0651 GMT.

U.S. West Texas Intermediate (WTI) crude futures were down 4 cents, or 0.1 percent, at $57.43 a barrel.

The Organization of the Petroleum Exporting Countries (OPEC) and non-OPEC producers last week rolled over their agreement to cut output by 1.8 million barrels per day (bpd) until the end of 2018, aiming to erode a global glut and drive up prices.

Although the world’s major oil producers reached an agreement last week, Kazakh Energy Minister Kanat Bozumbayev said on Tuesday that complying with the global oil output cut deal will be complicated for Kazakhstan, one of the non-OPEC members who supported the pact.

Goldman Sachs (NYSE:) said Saudi Arabia and Russia showed a stronger commitment to extending cuts and raised its Brent and WTI spot forecasts for 2018 to $62 and $57.50 per barrel respectively.

“By 2019, however, we believe the response of shale and other producers to higher prices will incentivize OPEC and Russia to pare back their now greater spare capacity, leaving risks to prices skewed to the downside,” the bank added.

In November, OPEC crude oil output fell by 300,000 bpd to its lowest since May, according to a Reuters survey released on Monday.

However, data last week showed U.S. crude output rose to nearly 9.5 million bpd in September, the highest monthly production since 2015.

“Both contracts (Brent and WTI) have now tested and failed major resistance levels, and all eyes will now be on the U.S. crude inventory data due tonight and tomorrow,” said Jeffrey Halley, senior market analyst at OANDA.

While rising U.S. oil production remains a hurdle for OPEC’s efforts to rebalance the market, U.S. crude inventories likely fell last week, marking their third straight weekly drop, a preliminary Reuters poll showed.

Seven analysts polled ahead of inventory reports from the industry group American Petroleum Institute (API) and the U.S. Department of Energy’s Energy Information Administration (EIA) estimated, on average, that crude stocks fell 3.5 million barrels in the week ended Dec. 1.

The official government inventory data is due on Wednesday at 10:30 a.m. EDT (1430 GMT).

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.