NEW YORK, JULY 19 2016 – Oil traded near $45 a barrel in New York as global crude markets were considered to be comfortably supplied despite threats to output from Nigeria to the U.S. and the North Sea.Futures gained 0.2 percent, having been briefly supported by reports that militants struck a pipeline in Nigeria, where production has already been curtailed by attacks. Data from the U.S. Energy Information Administration Wednesday is forecast to show nationwide crude inventories declined by 2.1 million barrels last week, though supplies will still be more than 100 million barrels above the five-year average.
While oil is still about 70 percent above the 12-year low reached in February, prices have declined from almost $52 in early June amid signs of weaker demand growth. A global supply glut continues to shrink as American crude output falls, but the market recovery will remain volatile as U.S. drillers use the rebound to place hedges that could help them increase production, according to BMI Research.
Nigeria Attack
West Texas Intermediate for August delivery, which expires Wednesday, traded up 10 cents at $45.34 a barrel on the New York Mercantile Exchange at 1:31 p.m. London time. The contract fell 71 cents to $45.24 on Monday. Total volume traded Tuesday was about 5 percent below the 100-day average. The more-active September contract rose 11 cents to $46.05.
Brent for September settlement rose 20 cents to $47.16 a barrel on the London-based ICE Futures Europe exchange, trading at a $1.11 premium to WTI for the same month. The contract on Monday lost 1.4 percent to $46.96.
Militants in Nigeria targeted the Warri pipeline, newspaper ThisDay reported, citing security forces it didn’t name. A spokesman for Nigerian National Petroleum Corp. said he was unable to confirm the attack immediately.
U.S. production rose by 57,000 barrels a day to 8.49 million a day in the week through July 8, the first gain in five weeks, according to data from the EIA. Crude stockpiles dropped for an eighth week to 521.8 million barrels during the period.
Oil-market news:
- Oil workers are planning strikes that may affect production at some of Royal Dutch Shell Plc’s fields in the North Sea. About 400 workers plan to walk out on July 26, the Unite union said in a statement.
- Companies in the U.S. added drilling rigs for the sixth time in seven weeks through July 15, according to figures Friday from Baker Hughes Inc.
- A venture between Arab Petroleum Investment Corp. and National Shipping Co. of Saudi Arabia will create the world’s largest fleet of oil tankers and support the kingdom’s plan to boost crude exports, Saudi Energy Minister Khalid Al-Falih said.
