Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

NYMEX crude gains early in Asia in cautious trade ahead of OPEC meet

Published 05/25/2016, 07:09 PM
Updated 05/25/2016, 07:10 PM
© Reuters.  NYMEX crude up in early Asia

© Reuters. NYMEX crude up in early Asia

Investing.com - Crude edged higher in early Asia on Thursday with investors cautious ahead of an OPEC meeting next week in Vienna which will be notable with long-time Saudi oil minister Ali bin Ibrahim Al-Naimi not heading the Saudi delegation.

On the New York Mercantile Exchange, WTI crude for June delivery traded up 0.18% to $49.65 a barrel.

Overnight, crude futures tested $50 a barrel on Wednesday, a level last reached in mid-October, before closing near session-highs as continued declines in domestic production offset an unexpected surge in U.S. gasoline inventories last week.

On the Intercontinental Exchange (ICE), Brent crude for July delivery wavered between $48.91 and $49.68 a barrel, before closing at $48.62, up 0.27 or 0.56% on the day.

Both the international and U.S. benchmarks of crude are up by more than 14% since talks at a closely-watched OPEC-Non OPEC summit in mid-April collapsed when Saudi Arabia insisted that Iran take part in any agreement to freeze production at January levels.

On Wednesday morning, the U.S. Energy Information Administration (EIA) said in its Weekly Petroleum Status Report that U.S. commercial crude inventories fell by 4.2 million barrels for the week ending on May 20 in comparison with the previous week. At 537.1 million barrels, U.S. crude oil inventories are at historically high levels for this time of year.

While analysts initially anticipated a build of 2.0 million barrels, they downgraded their expectations after the American Petroleum Institute reported a massive draw of 5.21 million barrels on Tuesday after the close of trading. At the Cushing Oil Hub in Oklahoma, stockpiles fell by 649,000 on the week, slightly above expectations for a draw of 400,000. Inventories at Cushing, the main delivery point for NYMEX oil, remain close to full storage capacity.

Notably, gasoline stockpiles rose by 2.04 million barrels on the week, while distillate fuel inventories decreased by 1.28 million barrels, marking the sixth straight week of declines. A surge in gasoline inventories can set off warning signals for analysts when crude stockpiles near total capacity.

Production, meanwhile, fell by 24,000 barrels per day to 8.791 million bpd, remaining near lows from September, 2014. Crude output across the U.S. has declined in 18 straight weeks.

Elsewhere, advisers for Donald Trump advised the presumptive U.S. Republican presidential nominee to take OPEC to task for adopting a long-term strategy aimed at driving down the price of oil in an apparent effort to crowd out U.S. shale producers. OPEC is widely expected to leave its production strategy unchanged when it convenes for a semi-annual meeting next week in Vienna.

Last week, Russia energy minister Alexander Novak expressed skepticism that OPEC will accomplish any meaningful developments at the meeting that could lead to a comprehensive freeze. At the same time, Iran has been hesitant to cap output as it continues to ramp up production with goals of reaching 4 million bpd in the second half of 2015.

"We have to look at the global playing field and see which of our partners - OPEC, Iran, Russia - are playing fair in the global marketplace," U.S. Congressman Kevin Cramer (R, North Dakota) told Reuters.

On Thursday, Trump is scheduled to deliver a speech at the Williston Basin Petroleum Conference in Bismarck, an area hit hard by the recent downturn in oil prices. Crude futures have slumped by more than 50% since hitting a peak of $115 a barrel in June, 2014.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.