Oil Trades Below $53 as U.S. Crude Stockpiles Gain, Dollar Drops
Oil traded below $53 a barrel in New York after an industry report was said to show an U.S. crude supply gain while the dollar dropped.
U.S. crude inventories rose 5.83 million barrels last week in an American Petroleum Institute report on Tuesday, people familiar with the data said. The Energy Information Administration will probably report that supplies expanded by 3 million barrels, according to the median estimate in a Bloomberg survey. Prices climbed earlier as the dollar slipped after a trade adviser to U.S. President Donald Trump said Germany is benefiting from a “grossly undervalued” currency.
“We were trading on the dollar earlier but attention is now shifting to inventories,” Carl Larry, director of oil and gas at consultant Frost & Sullivan in Houston, said by telephone. “Inventories are probably going to be strong because we’re going into maintenance season.”
Oil slipped 1.7 percent in January after rising the last two months of 2016 as the Organization of Petroleum Exporting Countries agreed on Nov. 30 to reduce supply, with 11 other nations including Russia joining the deal less than two weeks later. While Middle East producers implement the cuts, drillers targeting crude in the U.S. have boosted the rig count to the highest level since November 2015.
West Texas Intermediate for March delivery rose 18 cents, or 0.3 percent, to close at $52.81 a barrel on the New York Mercantile Exchange. Futures climbed as much as 1.8 percent to $53.56 earlier. WTI traded at $52.83 at 4:44 p.m. in New York after the API report.
Brent for March settlement, which expired Tuesday, climbed 47 cents to $55.70 a barrel on the London-based ICE Futures Europe exchange. The global benchmark crude closed at a $2.89 premium to WTI. The more-active April contract gained 26 cents to $55.58.
The Bloomberg Dollar Spot Index, a gauge of the currency against 10 major peers, dropped to the lowest level since November. A weaker greenback boosts the appeal of dollar-denominated commodities as an investment. The Bloomberg Commodity Index climbed as much as 1 percent.
Analysts projected the EIA report will show that U.S. refineries cut operating rates for a third week. U.S. refiners typically curb activity at this time of year as they perform maintenance.Oil-market news:
- Exxon Mobil Corp.’s biggest profit miss in at least a decade is the starkest sign yet that major oil explorers remain mired in the deepest market slump in a generation.
- Chevron Corp. froze Chairman and Chief Executive Officer John Watson’s salary and restructured the way it pays stock awards to boost pressure on top executives to improve long-term profits.
- Royal Dutch Shell Plc, looking to pare debt, accelerated its drive to shed assets on Tuesday by agreeing to the sale of fields in the North Sea and Thailand for as much as $4.7 billion.
- Seaway Crude Pipeline Co.’s 400,000-barrel-a-day Legacy line was shut Monday after it was ruptured by road workers near Dallas, cutting crude flows to the Gulf Coast.