Oil held gains above $50 a barrel before US government data forecast to show crude stockpiles extended declines, trimming a glut.
Futures rose as much as 0.5 percent in New York after climbing 9.6 percent the previous six sessions. Inventories probably fell 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 lost almost 26 million barrels since the end of June.
Oil has climbed above $50 a barrel for the first time since May amid optimism that output curbs by the Organization of Petroleum Exporting Countries and its allies are rebalancing the market and trimming global inventories. US 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 expected draw in crude” is supporting the market, said Tamas Varga, an analyst at brokerage PVM Oil Associates Ltd. in London. If the decline in inventories is confirmed, “we’re probably going to have steady numbers going into tomorrow.”
West Texas Intermediate for September delivery was at $50.38 a barrel on the New York Mercantile Exchange, up 21 cents, at 9:43 a.m. London time. Total volume traded was about 6.5 percent below the 100-day average. The contract gained 0.9 percent to $50.17 on Monday.
Brent for October settlement rose 12 cents to $52.84 a barrel on the London-based ICE Futures Europe exchange, and traded at a $2.39 premium to WTI for the same month. The September contract expired Monday after advancing 13 cents to $52.65.
US inventories remain about 90 million barrels above the five-year average, according to the EIA. The nation pumped 9.41 million barrels a day through July 21, near the highest level since 2015.
A US ban on Venezuelan trade would lead to a reshuffling of oil flows with likely limited impact on prices, according to Goldman Sachs Group Inc.
The Trump administration on Monday sanctioned Venezuelan President Nicola Maduro—who has led Venezuela since the death of Hugo Chavez in 2013—accusing him and his government of undermining democracy. He becomes the fourth head of state sanctioned by the US, joining North Korea’s Kim Jong Un, Zimbabwe’s Robert Mugabe and Syria’s Bashar al-Assad.
Saudi Arabia is considering a flexible tax system for state-owned oil company Aramco that would increase royalty payments when crude prices rise, according to people familiar with the deliberations.
“The extent of the drop in US 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.