The U.S. government is due to release its crude-stockpile report later Wednesday.
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As of writing, Brent oil futures for November delivery on the London ICE Futures Exchange nudged up 0.65% to $49.77 after plunging 1.4% previously on Monday.
After the market settled, the trade group American Petroleum Institute reported that USA crude stockpiles rose 942,000 barrels last week, in line with expectations of analysts polled by Reuters. The most important member of the Organization of Petroleum Exporting Countries began to increase production in June to meet a seasonal increase in domestic demand, as well as higher export requirements.
The main trigger for this has been surging Middle East crude output and a stronger dollar that was boosted by speculation of a USA rate hike by the year-end.
“Oil prices are caught between concerns about oversupply and a strong dollar on the one hand and the prospect of further jawboning from OPEC members that some form of production freeze could be on the cards”, CMC Markets senior analyst Michael Hewson said.
Saudi Arabia is the largest OPEC oil producer and exporter.
Futures slid 0.2 per cent in NY, trimming the monthly gain to 11 per cent. Iraq would support a proposal for the Organisation of Petroleum Exporting Countries and other major producers to freeze output, Prime Minister Haidar Al-Abadi said in Baghdad.
Meanwhile, a militant group in Nigeria said that it will no longer attack the country’s oil and gas facilities, which has caused output cuts by 700,000bpd to 1.56 million bpd.
Iran, which is returning to oil markets after years of sanctions, has been boosting its production to pre-sanction level. Earlier today, comments from Iran’s oil minister were taken as a positive sign. Iraq’s oil minister says that the country has exported more crude from its southern ports in August, and will continue to ramp up output.
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Crude prices soared almost $10 a barrel, or nearly 25%, in the first three weeks of August, as the prospect of an output freeze by major producers at an informal OPEC meeting in Algeria next month sparked a massive rally. The September OPEC meeting brings both uncertainties especially to analysts and traders, although speculations of glut-capping efforts linger to boost oil prices.
