Futures were little changed in New York. Crude stockpiles rose by 6.86 million barrels last week, the American Petroleum Institute was said to report on Tuesday. Saudi Arabian Energy Minister Khalid Al-Falih said he sees no need for immediate action in response to tighter U.S. sanctions on Iran, while the International Energy Agency said there remain “comfortable” levels of spare capacity.
Oil has rallied further after posting its best quarter since 2009 as the Saudis led output cuts by a coalition of producers, including Russia, to avoid a global glut. Disruptions in members of the Organization of Petroleum Exporting Countries such as Venezuela, Libya and Nigeria have also buoyed prices, with the White House adding to the supply crunch by refusing to extend sanctions waivers beyond May 2 for importing oil from Iran. However, the market remains well-supplied.
“The situation in the oil market has calmed down,” said Carsten Fritsch, an analyst at Commerzbank AG in Frankfurt. “Apparently, the global oil market is sufficiently supplied.”
West Texas Intermediate for June delivery declined 2 cents to $66.28 a barrel on the New York Mercantile Exchange at 1:44 p.m. in London after dropping as much as 53 cents earlier. Prices gained $2.30 over the previous two sessions to $66.30 on Tuesday, the highest close since Oct. 29.
Brent for June settlement gained 9 cents to $74.60 a barrel on the London-based ICE Futures Europe exchange. It increased 3.5 percent in the first two days of the week. The global benchmark crude was at a premium of $8.33 to WTI.
While the API reported a gain in nationwide inventories, its data showed a 389,000 barrel drop in the hoard at Cushing, Oklahoma. That would be a third consecutive draw at the U.S. storage hub if confirmed by government figures due Wednesday. The median forecast of analysts in a Bloomberg survey signals American crude stockpiles may have risen by 1 million barrels last week.
Although Saudi Arabia’s Al-Falih said there was no need for an instant response to the tougher sanctions on Iran, he told reporters in Riyadh that the kingdom will cater to the requirements of its customers, particularly those affected by the new U.S. policy.
“The estimated gain in American inventories is pacing down the rally we’ve seen earlier,” said Sungchil Will Yun, a commodities analyst at HI Investment & Futures Corp. in Seoul. “Oil’s expected to stay steady until we see more details on how the Saudis and its allies will bump up their output, going a step further from just signaling a boost.”
Read also: Trump’s ‘Zero’ Pledge on Iran Oil Sales Tests Key Relationships
The International Energy Agency said it’s ready to act if necessary to ensure the market is well-supplied, according to a statement. The Paris-based IEA said global oil markets are currently at “comfortable” levels of spare capacity, and that it will continue to monitor closely and remain engaged with major producers and consumers.
Other oil-market news: Crude market gauges suggest oil traders are betting on further price increases after the Trump administration’s decision to halt waivers from U.S. sanctions on Iran. Iran’s president, Hassan Rouhani, said it will be “impossible” to slash his nation’s oil exports to zero. U.S. oil is seen flowing freely to China again after slowing to trickle as more ships wait to make the long voyage from America with the easing of trade tensions. DM
Want to watch Richard Poplak’s audition for SA’s Got Talent?
Who doesn’t? Alas, it was removed by the host site for prolific swearing*... Now that we’ve got your attention, we thought we’d take the opportunity to talk to you about the small matter of book burning and freedom of speech.
Since its release, Pieter-Louis Myburgh’s book Gangster State, has sparked numerous fascist-like behavior from certain members of the public (and the State). There have been planned book burnings, disrupted launches and Ace Magashule has openly called him a liar. And just to say thanks, a R10m defamation suit has been lodged against the author.
Pieter-Louis Myburgh is our latest Scorpio Investigative journalist recruit and we’re not going to let him and his crucial book be silenced. When the Cape Town launch was postponed, Maverick Insider stepped in and relocated it to a secure location so that Pieter-Louis’ revelations could be heard by the public. If we’ve learnt one thing over the past ten years it is this: when anyone tries to infringe on our constitutional rights, we have to fight back. Every day, our journalists are uncovering more details and evidence of State Capture and its various reincarnations. The rot is deep and the threats, like this recent one to freedom of speech, are real. You can support the cause by becoming an Insider and help free the speech that can make a difference.
*No video of Richard Poplak auditioning for SA’s Got Talent actually exists. Unless it does and we don’t know about it please send it through.
Britain's Scotland Yard is built atop the site of an unsolved crime scene.