According to Bloomberg, futures rose as much as 0.7 percent in New York after falling 6.2 percent the previous three sessions. The market is saturated with stored crude and Saudi Arabia doesn’t see a need for the kingdom to produce at full capacity, Energy Minister Khalid Al-Falih told Al-Arabiya television as OPEC members plan to meet this month to discuss action to stabilize prices. U.S. crude inventories increased by 2.28 million barrels last week for a second straight gain, according to the Energy Information Administration.
Oil rose 7.5 percent in August amid speculation that talks in Algiers may lead to an agreement to manage the market. A cap on production would be positive, Al-Falih said in an interview last week, while ruling out an output cut. A freeze deal between members of the Organization of Petroleum Exporting Countries and other producers was proposed in February but a meeting in April ended with no final accord.
“The surplus is still there and that’s enough to keep the price from sustaining any strong rally,” said David Lennox, a resources analyst at Fat Prophets in Sydney. “We have the OPEC talks at the end of September and we’re going to get a lot of speculation driven-volatility leading into that.”
West Texas Intermediate for October delivery advanced as much as 33 cents at $45.03 a barrel on the New York Mercantile Exchange and was at $44.95 at 7:51 a.m. in London. The contract dropped 3.6 percent to $44.70 on Wednesday, the biggest decline since Aug. 1. Total volume traded was 50 percent below the 100-day average.
U.S. Stockpiles
Brent for November settlement was 18 cents higher at $47.07 a barrel on the London-based ICE Futures Europe exchange. The global benchmark traded at a $1.53 premium to WTI for November. The October Brent contract fell $1.33 to expire at $47.04 on Wednesday.
U.S. crude stockpiles increased to 525.9 million barrels through Aug. 26, the EIA reported Wednesday. Crude production dropped for a second week to 8.49 million barrels a day, while gasoline inventories declined by 691,000 barrels to 232 million. Cushing supplies fell to 63.9 million.
Oil-market news:
- U.S. weekly fuel demand was overstated in the first half of the year as the EIA under counted exports, the agency said on its website.
- BP Plc restarted its Atlantis field in the Gulf of Mexico as Tropical Storm Hermine moved away from area, according to a person familiar with the situation.
- The official factory gauge for China, the world’s second-biggest oil consumer, unexpectedly rose last month to the highest level in almost two years.