Oil Trades Near $41 as U.S. Crude Stockpiles Seen Increasing

Oil traded near $41 a barrel before U.S. government data forecast to show rising crude stockpiles kept supplies at the highest level in more than eight decades.

Futures for May fell as much as 0.9 percent in New York after the contract declined 0.2 percent Tuesday. Inventories are projected to have increased by 2.53 million barrels last week, according to a Bloomberg survey before an Energy Information Administration report Wednesday. This compares to industry data Tuesday that showed an 8.8 million barrel gain. Libya will skip a meeting between major oil exporters in Doha next month to freeze output, according to a person familiar with the situation.

“The large U.S. crude stockpiles will act as a headwind to price gains,” David Lennox, an analyst at Fat Prophets in Sydney, said by phone. “If producers can agree to remove some incremental supply from the market at the Doha meeting, what they lose in production, they gain in a price rise and additional revenue. Just talking about a freeze has helped oil move higher.”

Oil slumped to a 12-year low this year before rising on speculation that stronger demand and falling U.S. output will ease a global glut. Supply will respond to low investment and declines across the most important non-OPEC producers, setting the stage for a price recovery in the second half of this year, according to Jefferies Group LLC.

West Texas Intermediate oil for May delivery lost as much as 39 cents to $41.06 a barrel on the New York Mercantile Exchange Exchange An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv Read this Term and was at $41.08 at 9:05 a.m. Hong Kong time. The contract fell 7 cents to $41.45 on Tuesday. Total volume traded was about 70 percent below the 100-day average.

Brent for May Settlement Settlement Settlement in finance refers to the process when a buyer makes payment and receives the agreed-upon services or goods. The term is used on exchanges such as New York Stock Exchange (NYSE) when security changes hands. When the asset is transferred and placed in the new buyer's name, it is considered settled. This process could take a few hours or several days after a trade is made. It depends on the clearance process. In the United States, the settlement date for marketable stocks is usually 2 Settlement in finance refers to the process when a buyer makes payment and receives the agreed-upon services or goods. The term is used on exchanges such as New York Stock Exchange (NYSE) when security changes hands. When the asset is transferred and placed in the new buyer's name, it is considered settled. This process could take a few hours or several days after a trade is made. It depends on the clearance process. In the United States, the settlement date for marketable stocks is usually 2 Read this Term fell as much as 30 cents, or 0.7 percent, to $41.49 a barrel on the London-based ICE Futures Europe exchange. The contract added 25 cents $41.79 on Tuesday. The global benchmark crude traded at a 41-cent premium to WTI.

--With assistance from Stephen Stapczynski To contact the reporter on this story: Ben Sharples in Hong Kong at bsharples@bloomberg.net. To contact the editors responsible for this story: Ramsey Al-Rikabi at ralrikabi@bloomberg.net, Aaron Clark, Ovais Subhani

By: Ben Sharples

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