Oil held its gains above $50 a barrel after US inventories fell a fifth consecutive week and as Opec’s pledge to reduce output sparked speculation a global glut may ease.
Futures were little changed in New York after advancing 1.2 percent Thursday to close above $50 a barrel for the first time since June. US crude stockpiles shrank below 500 million barrels last week for the first time since January, government data showed. Opec pledged in Algiers last week to reduce the group’s production to 32.5 million to 33 million barrels a day in a bid to shrink the world’s bloated crude supplies and boost prices.
Oil has gained about 13 percent since the Organization of Petroleum Exporting Countries agreed Sept. 28 to cut production for the first time in eight years. Opec, which pumped at a record in September, will decide on quotas at an official meeting of the group in Vienna on Nov. 30. Hurricane Matthew is heading for Southeast US and may disrupt East Coast fuel shipments.
“Crude is bullish right now, supported by Opec’s pledge to cut production and lower-than-expected stockpiles in the US,” Hong Sung Ki, a Seoul-based commodities analyst at Samsung Futures Inc., said by phone. “However, uncertainties still remain as the market is generally skeptical about whether Opec will make a final decision in November, and whether the decision will be implemented among members.”
West Texas Intermediate for November delivery was at $50.43 a barrel on the New York Mercantile Exchange, down 1 cent, at 7:48 a.m. in London. The contract increased 61 cents to $50.44 a barrel on Thursday. Total volume traded was 46 percent below the 100-day average.
Brent for December settlement was at $52.50 a barrel, down 1 cent, on the London-based ICE Futures Europe exchange. The contract gained 65 cents, or 1.3 percent, to $52.51 a barrel on Thursday. The global benchmark crude traded at a $1.53 premium to WTI for December delivery.
US crude inventories dropped by 2.98 million barrels to 499.7 million barrels, the Energy Information Administration reported Wednesday. Opec members will meet next week for talks on implementing an output-cut deal, with Russia joining to discuss how producers from outside the group can participate in the plan, Venezuelan Oil Minister Eulogio Del Pino said in a government statement Wednesday.
Eighteen of 32, or 56 percent, of analysts, traders and brokers surveyed by Bloomberg Thursday were bearish on WTI. That’s up from 50 percent of respondents a week earlier. Eight, or 25 percent, of the respondents were bullish on the futures, while six of those surveyed were neutral.
Meanwhile, Saudi Arabian Oil Co., the world’s biggest oil company, is planning to sell shares in the entire business and not just in its refining or distribution operations, chief executive officer Amin Nasser said in an interview.