Analysts also expect the weekly U.S. commercial crude inventories to be released by the EIA later Wednesday to show an increase, which would further add to oversupply concerns. Previous talks on an output freeze collapsed in April. According to the API, inventory data showed a substantial draw of 7.5 million barrels of crude during the week-ended September 16.
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USA oil prices edged up on Tuesday on hopes the planned restart of country’s main gasoline pipeline after a leak more than a week ago will boost demand, while Brent slipped amid skepticism over a proposed deal to freeze production.
In New York trade, U.S. benchmark West Texas Intermediate for October rose 14 cents to $43.44 a barrel.
There have been substantial API draws in two of the last three weeks and the latest data will support market sentiment, although the official data on Wednesday will still have an important influence and any build would be a significant setback to confidence with further high volatility likely.
Brent for November settlement rose as much as 69 USA cents, or 1.5 per cent, to US$46.57 a barrel on the London-based ICE Futures Europe exchange. WTI’s November contract, the market’s new spot month from Wednesday after the October contract expired at Tuesday’s settlement, rose 73 cents.
Despite the upcoming talks in the Algerian capital, OPEC’s biggest exporters such as Saudi Arabia, Iran, Iraq, Nigeria and Libya have all raised or been trying to hike output in recent months. OPEC Secretary-General Mohammed Barkindo fanned the bullish flames by saying he thought the potential freeze deal could last one year, or perhaps longer.
Traders said that the main WTI price driver had been American Petroleum Institute data showing a 7.5 million barrel draw to 507.2 million barrels in US crude inventories, the third weekly stock draw.
“We think that if this deal is reached we could increase oil prices by between $10 and $15 dollars per barrel”, added Del Pino, who is also the president of state oil company PDVSA, in an interview with Venezuela’s Union Radio.
Russian Federation s comments bolstered hopes that the producer talks by the 14-nation OPEC cartel and Russian Federation in Algeria from September 26-28 could reach a deal that would at least put a floor on crude prices.
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While WTI rose, USA gasoline futures fell 4 percent to $1.3646 a gallon on worries that a gasoline glut would return with the full restart of the Colonial line.
