Oil declined for a fourth day before weekly U.S. government data forecast to show increasing crude stockpiles kept supplies at the highest level in more than eight decades.
Futures lost as much as 0.6 percent in New York after slipping 0.2 percent Monday. Inventories probably increased by 3 million barrels last week, a Bloomberg survey shows before an Energy Information Administration report Wednesday. That would be a seventh weekly gain. Indonesia will attend a meeting of major oil exporters in Doha next month to consider an output freeze, according to Energy and Mineral Resources Minister Sudirman Said.
“The size of the crude inventories combined with the fact we’ve seen a significant rally in prices is going to limit gains,” Ric Spooner, a chief analyst at CMC Markets in Sydney, said by phone. “Oil is in a short-term downtrend.”
Oil tumbled to a 12-year low this year before rebounding on speculation the global surplus will ease as U.S. output declines. Saudi Arabia, Russia, Qatar and Venezuela agreed last month they would cap production at January levels if other producers followed suit to tackle a global oversupply.
West Texas Intermediate for May delivery was at $39.25 a barrel on the New York Mercantile Exchange, down 14 cents, at 10:08 a.m. Hong Kong time. The contract lost 7 cents to close at $39.39 Monday. A fourth day of decline would be the longest run of losses since Feb. 11. Total volume traded was about 56 percent below the 100-day average.
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Brent for May settlement was 17 cents lower at $40.10 a barrel on the London-based ICE Futures Europe exchange. The contract fell 17 cents to $40.27 Monday, the lowest close since March 15. The global benchmark crude was at a premium of 85 cents to WTI.
U.S. crude inventories increased to 532.5 million barrels through March 18, according to data from the EIA. Gasoline stockpiles probably dropped by 2.5 million barrels last week, according to the median estimate in the Bloomberg survey. That would be a sixth weekly decline.
Output freeze and oil market news:
- Prices need to be at a sustainable level that is attractive for producers without creating pressures, Indonesia’s Said told reporters in Jakarta.
- Crude at $45 to $50 a barrel is enough to encourage India’s own exploration without squeezing fuel consumers, Oil Minister Dharmendra Pradhan said in an interview Monday.
- Commodities including oil and copper are at risk of steep declines as recent advances aren’t fully grounded in improved fundamentals, according to a report from Barclays Plc.
–With assistance from James Paton To contact the reporter on this story: Ben Sharples in Hong Kong at firstname.lastname@example.org. To contact the editors responsible for this story: Ramsey Al-Rikabi at email@example.com, Ovais Subhani, Sungwoo Park
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