Bloomberg: Oil holds gains above $50 as U.S. stockpiles seen extending drop
Oil held gains above $50 a barrel before U.S. government data forecast to show crude stockpiles extended declines, trimming a glut, according to Bloomberg.
Futures rose 0.2 percent in New York after climbing 9.6 percent the previous six sessions. Inventories probably decreased by 3.3 million barrels last week for a fifth weekly drop, according to a Bloomberg survey before a report from the Energy Information Administration Wednesday.
Stockpiles have declined by almost 26 million barrels since the end of June.
Read alsoOil hits two-month high on tighter U.S. market, Venezuela sanctions risk – mediaOil has climbed above $50 a barrel for the first time since May amid optimism output curbs by the Organization of Petroleum Exporting Countries and its allies are rebalancing the market and trimming global inventories. U.S. crude imports from OPEC slid 2.6 percent in May from April and shipments from the group may fall further this month as Saudi Arabia deepens cuts.
"The extent of the drop in U.S. inventories over recent weeks has been quite constructive and the market is responding to that," said Ric Spooner, an analyst at CMC Markets in Sydney. "The rally is moving into a higher risk area now and shale production will increasingly become the key factor in traders' minds if prices continue to climb further."
West Texas Intermediate for September delivery was at $50.26 a barrel on the New York Mercantile Exchange, up 9 cents, at 1:52 p.m. in Hong Kong. Total volume traded was about 25 percent below the 100-day average. The contract gained 46 cents, or 0.9 percent, to $50.17 on Monday.
Brent for October settlement gained 6 cents to $52.78 a barrel on the London-based ICE Futures Europe exchange. The September contract expired Monday after rising 13 cents to $52.65. The global benchmark crude traded at a premium of $2.43 to WTI.
U.S. crude inventories remain about 90 million barrels above the five-year average, according to EIA data. The nation pumped 9.41 million barrels a day through July 21, near the highest level since July 2015.