Oil futures rose Wednesday, buoyed after industry data showed a large drop in U.S. crude oil inventories and as traders await a meeting of OPEC producers and their allies amid growing expectations for an agreement to extend and deepen output cuts.

West Texas Intermediate crude for January delivery

CLF20, +4.05%

 on the New York Mercantile Exchange rose 91 cents, or 1.6%, to $57.01 a barrel, while February Brent crude

BRNG20, +3.81%

 was up $1.08, or 1.8%, at $61.90 a barrel on ICE Europe.

The American Petroleum Institute late Tuesday reported that U.S. crude inventories fell by 3.7 million barrels in the week ended Nov. 29, according to sources. They said the data also showed gasoline stocks rose by 2.9 million barrels, while distillate supplies rose by 794,000 barrels.

“Oil prices are holding firm supported by the bigger than expected API draw, but the report is likely playing second or third fiddle to the broader OPEC meeting and tariff escalation narratives,” said Stephen Innes, chief Asia market strategist at AxiTrader, in a note.

The Energy Information Administration’s more closely followed tally of U.S. inventories is due Wednesday morning. Analysts surveyed by S&P Global Platts are looking, on average, for crude inventories to decline by 700,000 barrels, while gasoline stocks are seen up 2.7 million barrels and distillates up 460,000 barrels.

Speculation has grown that the Organization of the Petroleum Exporting Countries and its allies — known collectively as OPEC+ — will add to an existing agreement to curb output by 1.2 million barrels a day. That agreement is due to run out at the end of March.

“I’m sure OPEC is more than aware that oil traders will probably hammer oil prices materially lower in the absence of a supply cut, even more so given the diminishing near term trade deal optimism,” Innes said. “So crucial for oil price stability remains how OPEC+ will deal with expectations that a further production cut will be announced. They may need to give in to the market demands where they want to or not.”

Oil posted a mixed performance Tuesday, with Brent crude, the global benchmark, seeing its lowest close in almost five weeks while WTI, the U.S. benchmark, rose. Some pressure was attributed to uncertainty over U.S.-China trade negotiations after President Donald Trump said there was no timetable for a deal and that it might be best to wait until after the 2020 election.

Those remarks contributed to a selloff in equities and other assets, including oil, perceived as risky as investors jumped into traditional haven assets. Stocks were finding support early Wednesday, however, after a Bloomberg report said Beijing and Washington were on track to complete a phase one agreement before a Dec. 15 deadline that would see the U.S. impose another round of tariffs on imports of Chinese goods.

In other energy trade, January gasoline

RBF20, +3.30%

rose 1.8% to $1.5916 a gallon, while January heating oil

HOF20, +3.11%

was up 1.6% at $1.9095 a gallon.

January natural gas

NGF20, -1.88%

 fell 2.2% to $2.387 per million British thermal units.

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