Oil slips as industry group reports unexpected spike in U.S. stockpiles JESSICA SUMMERS

Crude retreated after an industry report showed a surprise increase in U.S. crude stockpiles and mounting gasoline supplies.

Futures in New York slipped from the settlement price after the American Petroleum Institute was said to report nationwide crude inventories rose by 833,000 barrels last week. At the same time, gasoline inventories jumped by 2.33 million barrels. That would be a fourth straight build if Energy Information Administration data confirms it on Wednesday.

“It’s clearly negative for crude that’s just been bouncing around in anticipation of the OPEC meeting” next week, said James Williams, president of London, Ark.based energy researcher WTRG Economics. “It’s clearly a bearish report.”

Earlier in the session, crude switched between gains and losses in New York before closing at the highest in more than a week. West Texas Intermediate crude closed within one per cent of its opening price for a third consecutive day. Traders are gauging whether OPEC and allied producers will relax supply cuts at the urging of Saudi Arabia and Russia, even as Iraq, Iran and Venezuela stand in opposition.

Russia plans to propose OPEC and its allies return production to October 2016 levels, rolling back most of their output cuts within three months, according to a person familiar with Russian thinking.

Citigroup Inc. said a boost by the group’s four main producers is “inevitable,” with such a move reviving about 500,000 barrels a day of halted output. The debate has raged as OPEC on Tuesday emphasized deep uncertainty over the strength of demand for its crude.

WTI crude for July delivery traded at US$66.02 a barrel at 4:39 p.m. after settling at US$66.36 a barrel on the New York Mercantile Exchange. Total volume traded was about 25 per cent below the 100day average.

Brent futures for August settlement slipped 58 cents to end the session at US$75.88 on the London-based ICE Futures Europe exchange. The global benchmark traded at a US$9.60 premium to WTI for the same month.

U.S. crude stockpiles probably fell 1.25 million barrels last week, according to a Bloomberg survey ahead of the release of Energy Information Administration data on Wednesday.

At the same time, inventories at the biggest U.S. storage complex in Cushing, Okla., decreased by 900,000 barrels last week, according to a forecast compiled by Bloomberg.

The API also was said to report that Cushing supplies dropped last week, while distillate supplies edged higher.