Oil Hovers Near 3-Year High as U.S. Stockpiles Forecast to Drop

Oil held near a three-year high ahead of U.S. inventory data that’s expected to show a ninth week of crude-stockpile declines.

Futures were little changed in New York after rising 0.4 percent on Wednesday. The American Petroleum Institute estimates stocks fell by 5.12 million barrels last week, a steeper drop than the 3.15 million forecast in a Bloomberg survey before government data due Thursday. Output from OPEC, which releases monthly data later on Thursday, expanded last month, according to people familiar with the figures.

Oil is extending its run after two annual gains as the Organization of Petroleum Exporting Countries and its allies including Russia maintain they will continue to curb supplies. Prices have risen to a level that may result in the International Energy Agency increasing its estimates for U.S. production this year, Executive Director Fatih Birol said in New York. The Paris-based agency releases its monthly report Friday.

“The market will want to see whether the EIA report can match the API’s crude draw and whether overall inventories are falling,” said Giovanni Staunovo, commodity analyst at UBS Group AG. “After last week’s drop, the crude production data will be interesting too.”

West Texas Intermediate for February delivery was at $63.99 barrel on the New York Mercantile Exchange, up 2 cents, at 10:26 a.m. in London. Total volume traded was about 10 percent below the 100-day average.

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Brent for March settlement lost 1 cent to $69.37 a barrel on the London-based ICE Futures Europe exchange after gaining 0.3 percent on Wednesday. The global benchmark crude traded at a premium of $5.42 to WTI for the same month.

U.S. gasoline inventories probably rose by 3.99 million barrels last week, according to the median estimate in a Bloomberg survey. Total crude and product stockpiles fell to 1.2 billion barrels in the week ended Jan. 5, the seventh drop in the last eight weeks.

Oil-market news:

• OPEC output increased to 32.416 million barrels a day in December, according to preliminary estimates compiled from independent sources, also known as secondary sources, people familiar with the matter said.
• Royal Dutch Shell Plc and BP Plc agreed to annual deals to buy Libyan crude, underscoring how the North African country’s recovering production and improving security are enticing some of the world’s largest oil companies.
• BP agreed to help increase crude production at northern Iraq’s Kirkuk fields as part of a government push to restore output and export capacity.