Crude oil futures edge up, fuelled by global cues

The U.S. Energy Information Administration reported Wednesday that domestic crude oil inventories expanded by eight million barrels last week, more than analysts surveyed by The Wall Street Journal had expected.

Oil failed to sustain a gain above $50 a barrel earlier this month amid signs the market surplus will persist.

Inventories rose by more than 7.5 million barrels in the previous week and have gained more than 22 million barrels in four weeks.

“At least in the near term, the market is testing the argument that the decline in product inventories for last week was more critical than the build in crude oil, although we think much of the recovery is more technical in nature”, said Tim Evans of Citi Futures.

Moscow is ready to compete with the Saudi-dominated OPEC cartel even if it continues to exceed its quota, said Russian Energy Minister Aleksandr Novak on Friday.

United States crude’s West Texas Intermediate (WTI) oil slipped 10 cents to $45.10. The November contract, which expired on Tuesday, finished down 34 cents at $45.55 per barrel. The global crude benchmark was up nearly 2% earlier in the day.

“The dovish tone from the ECB yesterday is supportive for oil prices as it improves the outlook for growth in Europe”, Jens Pedersen, an analyst at Danske Bank A/S in Copenhagen, said by e-mail.

United States government report Wednesday showed a hefty weekly increase in crude stockpiles, underscoring how accustomed to bad news the crude market has become.

Economic news from the United States was moderately upbeat as housing starts increased 6.5 percent in September to an annual pace of 1.21 million units, beating expectations for 1.15 million units.

Refinery utilisation in the world’s biggest economy rose 0.4 percentage points to 86.4 per cent after slipping to the lowest level since January in the week ended October 9, according to the EIA. “Seasonally speaking though, it is common to see inventories peak in end-October as it’s the off-season”. The anticipated resumption of Iranian oil exports, most likely later this year, is also exacerbating concerns of a longer global glut and depressed prices.

More technical meetings will be necessary to clarify the Venezuelan proposal before such a summit, Russia’s Galkin said.

Ex-Soviet oil producers, including Russia and Azerbaijan, are unlikely to significantly reduce output in order to lift global prices, industry experts said, leaving little chance of a deal when OPEC experts meet with non-OPEC producers on Wednesday.