Oil edged up on Tuesday ahead of the release of U.S. crude inventory data, which in recent weeks has provided bullish surprises, but comments by OPEC members regarding chances of an output cut kept a lid on prices.
Brent crude oil futures was up 21 cents at $51.67 per barrel by 1100 GMT. U.S. West Texas Intermediate (WTI) crude futures turned positive, gaining 30 cents to $50.82.
The American Petroleum Institute is due to publish weekly crude stocks estimates at 2030 GMT, followed by the official Energy Information Administration data due on Wednesday.
“Crude oil does not want to drop the support until it sees if it can use the weekly U.S. statistics for another test of an upside break-out,” analysts at Petromatrix said in a note.
U.S. crude inventories were seen to have risen last week by 800,000 barrels to 469.5 million barrels, compared with a 5 million barrel fall in the previous week. [EIA/S]
Analysts said a leak in a pipeline leading out of the huge Cushing, Oklahoma, storage hub should lead to more build up of stocks in the coming weeks.
But inventory data has surprised by showing drawdowns in six of the seven past weeks, including the largest fall since 1999 when analysts foresaw a rise. The data is closely watched to gauge supply and demand in the world’s biggest crude consumer.
The verbal jockeying among OPEC’s 14 member states ahead of a Nov. 30 meeting that may lead to a cut in output continued this week, with Iraq emerging as a possible dissenter and non-member Russia as a potentially compliant collaborator.
“So for now the market remains range-bound while jumping from one headline to another,” said Ole Hansen, head of commodity research at Saxo Bank.
“Potential negative price news such as rising Libyan production, Iraq not wanting to cut, Indonesia seeking a 42 percent production increase in 2017, the widest contango of the year in Brent, are currently being ignored,” he said.
Iraq, the second-largest producer in the Organization of the Petroleum Exporting Countries, said on Sunday it wanted to be exempt from output curbs as it needed more money to fight Islamic State militants.
Fellow OPEC members Iran, Nigeria and Libya are already expected to be exempt from any deal that may be struck at the Nov. 30 meeting, all of which would put pressure on Saudi Arabia to shoulder a significant proportion of the cuts.
OPEC’s oil production has in any case reached record highs as member states vie for market share and some overcome conflict-related obstacles to production. Nigeria’s oil production has risen to 1.9 million barrels per day (bpd), its petroleum ministry said in a tweet on Tuesday.