The market will get the official weekly update on U.S. domestic petroleum supplies
Oil prices drifted between narrow gains and losses early Wednesday, supported by a weaker dollar but limited by fresh evidence that U.S. supplies continue to build.
West Texas Intermediate crude for January delivery CLF9, -0.72% was recently up 14 cents, or 0.2%, at $51.69 a barrel but has traded down to $51.36 and briefly above $52 on the New York Mercantile Exchange. January Brent crude LCOF9, -0.78% the global benchmark, was last down 4 cents, or nearly 0.1%, to $60.16 a barrel on ICE Futures Europe but was earlier as high as $61.27.
The ICE U.S. Dollar Index DXY, +0.10% was flat after gaining Tuesday when Federal Reserve Vice Chairman Richard Clarida said in a speech that he backed continued gradual interest rate increases. Fed Chairman Jerome Powell speaks Wednesday.
As supply factors remain in focus, the American Petroleum Institute, an industry group, reported late Tuesday that U.S. crude stockpiles grew by 3.5 million barrels last week.
The market will get the official weekly update on U.S. domestic petroleum supplies from the Energy Information Administration Wednesday. The data may show a 500,000 barrel increase in crude stocks for the week ended Nov. 23, according to a poll of analysts and traders conducted by The Wall Street Journal. Analysts polled by S&P Global Platts had expected the government to report a decline of 430,000 barrels in crude stockpiles for the week ended Nov. 23. If so, that would mark the first weekly decline for crude supplies in 10 weeks. The API data may cloud that forecast.
Oil has seen a great deal of volatility in recent weeks, with WTI futures plunging 7.7% on Friday for the biggest one-day percentage loss since July 2015. They also settled that day at their lowest since October 2017. On Monday, crude bounced 2.4% higher, for its biggest one-day gain in eight weeks.
Prices had climbed to nearly four-year highs in early October only to plunge into a bear market on fears of a global glut and concerns about world economic growth. The drop has left both grades of crude off more than 30% from their peaks.
Oil was boosted Monday on talk of a meeting this week by officials from Russia and Saudi Arabia, feeding anticipation of a potential agreement to cut output ahead of a Dec. 6 meeting of the Organization of the Petroleum Exporting Countries.
“A significant production cut on the part of OPEC and its allied non-OPEC producers at their meeting next week in Vienna will thus be needed to rebalance the oil market next year and ensure that stocks do not rise any further,” analysts at Commerzbank wrote in a note Wednesday. “Preparatory talks are already likely to be held on the fringes of the weekend’s G-20 summit in Venezuela.”
Traders and analysts will be looking to the Group of 20 summit in Argentina later this week for U.S.-China trade developments and hints on energy demand.
In other energy trading, December gasoline RBZ8, -0.08% rose 0.6% to $1.4291 a gallon, while December heating oil HOZ8, -1.21% lost 0.2% to $1.8823 a gallon.
December natural gas NGZ18, +1.97% ahead of the contract’s expiration at Wednesday’s settlement, was little changed at $4.262 per million British thermal units.