Oil near one-month high as investors await OPEC outcome

London - Oil held near the highest price in more than a month as industry data showed US crude stockpiles declined before OPEC meets to decide on extending supply curbs.

Futures dropped as much as 0.5% in New York. US inventories fell by 1.5 million barrels last week, the American Petroleum Institute was said to report. The Organisation of Petroleum Exporting Countries and its allies came closer to prolonging their supply deal after a ministerial committee was said to recommend another nine months of cuts.

Oil has climbed as Saudi Arabia and non-OPEC member Russia rally support for a nine-month extension ahead of a ministerial meeting in Vienna on Thursday. While the curbs have succeeded in denting stockpiles in the US, inventories still remain above the five-year average while American drillers add more rigs and boost production.

“I would say the market is in a waiting position before the OPEC meeting tomorrow,” said Carsten Fritsch, a commodity analyst at Commerzbank in Frankfurt. “With all these comments coming in, a nine-month extension is priced in.”

West Texas Intermediate for July delivery was at $51.26 a barrel on the New York Mercantile Exchange, down 21 cents, at 13:49.

Total volume traded was about 65% above the 100-day average. Prices ended on Tuesday at $51.47, the highest since April 18.

Brent for July settlement was down 10c at $54.05 a barrel on the London-based ICE Futures Europe exchange, and traded at a $2.79 premium to WTI. The global benchmark crude rose 28c to $54.15 on Tuesday.

While the API was said to report a 1.5 million-barrel drop in US inventories, a Bloomberg  survey estimated a 2 million-barrel decrease. That would be the seventh weekly decline after supplies rose to the highest in more than three decades at the end of March. The Energy Information Administration will release stockpile data later Wednesday.

Oil-market news:

Joint Ministerial Monitoring Committee will discuss several options for extension of OPEC/non-OPEC supply cuts including 12 months, Kuwait Oil Minister Issam Almarzooq told reporters in Vienna before the meeting.

Russia supports a nine-month extension of the oil deal, as does Venezuela, their energy ministers said in the Austrian capital.  Moody’s Investors Service cut its rating on China’s debt for the first time since 1989, challenging the view that the nation’s leadership will be able to rein in leverage while maintaining the pace of economic growth.

Iraq is mulling an oil-hedging program to lock in prices for future crude sales, potentially topping a similar deal run by Mexico that is considered the largest energy trade in Wall Street.

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