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Oil turns higher as focus shifts to U.S. stockpile data

Published 04/04/2017, 08:05 AM
© Reuters.  Oil turns higher ahead of U.S. stockpile data
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Investing.com - Oil prices turned higher in U.S. trading on Tuesday, reversing earlier losses as investors looked ahead to weekly data from the U.S. on stockpiles of crude and refined products.

Industry group the American Petroleum Institute is due to release its weekly report at 4:30PM ET (20:30GMT) later on Tuesday. Official data from the Energy Information Administration will be released Wednesday, amid forecasts for an oil-stock drop of 0.5 million barrels.

The U.S. West Texas Intermediate crude May contract tacked on 32 cents, or around 0.6%, to $50.55 a barrel by 8:05AM ET (12:05GMT), after falling to an overnight low of $49.88. The U.S. benchmark lost 36 cents on Monday.

Elsewhere, Brent oil for June delivery on the ICE Futures Exchange in London added 37 cents to $53.49 a barrel. The global benchmark declined 41 cents a day earlier.

Crude spent most of the overnight session in negative territory as a rebound in Libyan crude production and an ongoing increase in U.S. shale drilling activity exacerbated concerns about a glut.

Libya announced the production resumption at the Sharara field, the country's largest, after a one-week shutdown. The field was producing around 220,000 barrels per day prior to the March 27 closure.

Meanwhile, U.S. drillers last week added rigs for an 11th week in a row, data from energy services company Baker Hughes showed on Friday, extending a 10-month drilling recovery.

That brought the total count to 662, the most since September 2015, underlining concern that an ongoing rebound in U.S. shale production could derail efforts by other major producers to rebalance global oil supply and demand.

OPEC agreed in November last year to curb its output by about 1.2 million barrels per day between January and June. Russia and 10 other non-OPEC producers have agreed to jointly cut by an additional 600,000 barrels per day.

In total, they agreed to reduce output by 1.8 million barrels per day to 32.5 million for the first six months of the year, but so far the move has had little impact on inventory levels.

A joint committee of ministers from OPEC and non-OPEC oil producers will meet in late April to present its recommendation on the fate of the pact. A final decision on whether or not to extend the deal beyond June will be taken by the oil cartel on May 25.

Elsewhere on Nymex, gasoline futures for May inched up 0.5 cents, or 0.4%, to $1.701 a gallon, while May heating oil gained 1.1 cents to $1.574 a gallon.

Natural gas futures for May delivery added 2.9 cents to $3.157 per million British thermal units.

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