Oil traded near $41 a barrel before U.S. government data forecast to show rising crude stockpiles kept supplies at the highest level in more than eight decades.
Futures for May fell as much as 0.9 percent in New York after the contract declined 0.2 percent Tuesday. Inventories are projected to have increased by 2.53 million barrels last week, according to a Bloomberg survey before an Energy Information Administration report Wednesday. This compares to industry data Tuesday that showed an 8.8 million barrel gain. Libya will skip a meeting between major oil exporters in Doha next month to freeze output, according to a person familiar with the situation.
“The large U.S. crude stockpiles will act as a headwind to price gains,” David Lennox, an analyst at Fat Prophets in Sydney, said by phone. “If producers can agree to remove some incremental supply from the market at the Doha meeting, what they lose in production, they gain in a price rise and additional revenue. Just talking about a freeze has helped oil move higher.”
Oil slumped to a 12-year low this year before rising on speculation that stronger demand and falling U.S. output will ease a global glut. Supply will respond to low investment and declines across the most important non-OPEC producers, setting the stage for a price recovery in the second half of this year, according to Jefferies Group LLC.
West Texas Intermediate oil for May delivery lost as much as 39 cents to $41.06 a barrel on the New York Mercantile Exchange and was at $41.08 at 9:05 a.m. Hong Kong time. The contract fell 7 cents to $41.45 on Tuesday. Total volume traded was about 70 percent below the 100-day average.
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Brent for May settlement fell as much as 30 cents, or 0.7 percent, to $41.49 a barrel on the London-based ICE Futures Europe exchange. The contract added 25 cents $41.79 on Tuesday. The global benchmark crude traded at a 41-cent premium to WTI.
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