Oil edges up ahead of U.S. storage data as OPEC, Fed see robust economy - REUTERS
NEW YORK (Reuters) - Oil prices edged up on Wednesday on positive economic comments from U.S. Federal Reserve Chair Jerome Powell and the Organization of the Petroleum Exporting Countries (OPEC) ahead of a weekly report on U.S. stockpiles.
Brent futures LCOc1 rose 31 cents, or 0.5%, to settle at $62.37 per barrel, while U.S. West Texas Intermediate CLc1 crude gained 32 cents, or 0.6%, to settle at $57.12.
“The complex received a lift today ... on a rebound in risk appetite that appeared to be fuelled by ... Powell’s testimony that emphasized growth and maintenance of low rates,” Jim Ritterbusch, president of Ritterbusch and Associates in Galena, Illinois, said in a report.
Powell said the U.S. economy would see a “sustained expansion” with the full impact of recent interest rate cuts still to be felt.
“The baseline outlook remains favorable,” Powell said.
OPEC said it saw no signs of global recession and rival U.S. shale oil production could grow by much less than expected in 2020.
OPEC Secretary General Mohammad Barkindo said global economic fundamentals remained strong and that he was still confident the United States and China would reach a trade deal.
“It will almost remove that dark cloud that had engulfed the global economy,” Barkindo said, adding it was too early to discuss the output policy of OPEC’s December meeting.
He also said some U.S. companies were now saying oil production would grow by just 0.3-0.4 million barrels per day next year - or less than half of previous expectations - reducing the risk of an oil glut next year.
The U.S. Energy Information Administration (EIA), however, projected U.S. oil output hit a record of 13 million bpd this month and will grow more than expected in 2019 and 2020. [EIA/M]
U.S. crude oil inventories likely climbed by 1.6 million barrels last week, which would be the third weekly increase in a row, according to a Reuters poll on Tuesday. [EIA/S]
Some analysts said that forecast build was bullish because it was much smaller than the prior week, the same week last year and the five-year average for the week.
The expected build compares with increases of 7.9 million barrels during the prior week ended Nov. 1, 10.3 million barrels during the week of Nov. 9 in 2018 and the five-year average increase for the week of 3.7 million barrels.
The American Petroleum Institute (API) is scheduled to release its data for the latest week at 4:30 p.m. EST (2130 GMT) on Wednesday, while the weekly report from EIA is due at 11:00 a.m. EST on Thursday. Both reports were delayed a day for the U.S. Veterans Day holiday on Monday. [API/S]
U.S. President Donald Trump, meanwhile, said on Tuesday that Washington and Beijing were close to finalising a trade deal, but he fell short of providing a date or venue for the signing ceremony.
Oil futures, however, briefly pared gains Wednesday afternoon after the Wall Street Journal reported U.S.-China trade negotiations “hit a snag” over farm purchases.
Additional reporting by Florence Tan in Singapore and Dmitry Zhdannikov in London; Editing by Marguerita Choy and Mark Potter