Oil Holds Near $53 as Record U.S. Crude Stockpiles Seen Falling

Oil traded near $53 a barrel after the longest winning streak since December before U.S. government data forecast to show record crude stockpiles declined.

Futures slid 0.4 percent in New York after rising 5.7 percent in the previous five sessions. Inventories probably dropped by 1.5 million barrels last week, according to a Bloomberg survey before an Energy Information Administration report on Wednesday. Libya declared force majeure at a key export terminal as its biggest field stopped producing just a week after it reopened.

Oil has rallied above $50 a barrel after some members of the Organization of Petroleum Exporting Countries voiced support for an extension of production cuts past June, offsetting rising U.S. output. The curbs have stabilized the market, according to Russia, which is among 11 other nations outside the group that have joined in the pact aimed at easing a global glut.

“There is potential for some good upside to the oil price provided that OPEC maintains compliance with cuts,” said David Lennox, a resource analyst at Fat Prophets in Sydney. “Investors will continue to watch what happens with U.S. production, which has been trending higher. The market has become accustomed to fluctuating Libyan supply.

Bloomberg