Oil edges up ahead of
U.S. data, OPEC jostling caps gains
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[October 25, 2016]
By Sabina Zawadzki
LONDON
(Reuters) - 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.
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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.
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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.
(Additional reporting by Henning Gloystein and Keith Wallis in Singapore;
editing by Susan Thomas)
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