Crude loses some steam over stockpile report

Crude surrendered most of the day’s gains after an industry report showed a surprise increase in U.S. crude stockpiles.

Futures dropped in London and New York after the American Petroleum Institute was said to report a 2.9 million-barrel rise in American oil inventories last week. That would be the first expansion since early August if the federal government’s energy data unit confirms it on Wednesday. Among analysts, the consensus expectation is for a 1.5-million drop.

“We’re now in the time when crude inventories often drop and if that’s the case, it might take a little bit of the wind out of yesterday’s big jump in prices,” said James Williams, president of London, Arkansasbased energy researcher WTRG Economics.

As the summer driving season ends in North America, refiners shut key units for maintenance, and allow crude to accumulate in storage tanks.

Crude futures in London and New York advanced Monday and Tuesday after the Organization of Petroleum Exporting Countries and allied countries indicated they intend to match output closely to demand and shrugged off the threat to Iranian supplies over the weekend. That’s despite President Donald Trump’s pressure to release more supplies and lower prices.

“The market is assuming that OPEC will behave as they claimed they will at this meeting, but I don’t think that’s necessarily something that will be long-lived,” said Thomas Finlon, director of Energy Analytics Group in Wellington, Florida. A big reduction in Iranian exports “will cause the market to tighten up.”

Brent for November slipped 37 cents to $81.57 a barrel at 4:59 p.m. New York time on the ICE Futures Europe exchange. The global benchmark earlier settled at $81.87, the highest since November 2014.

West Texas Intermediate for November delivery traded at $72.06 a barrel at 4:46 p.m. after settling at $72.28 on the New York Mercantile Exchange. Total volume traded was about 16 percent below the 100-day average.

Trump said OPEC is “ripping off the world” in an address to the United Nations. Meanwhile, Iranian oil tankers are starting to disappear from global satellite tracking systems as the implementation date for the next round of sanctions approaches.

“Oil prices at $72 is quite an interesting level we haven’t seen in a long time,” said Phil Streible, senior commodity broker at RJ O’Brien & Associates. “Brent and WTI have been some of the better performing commodities over the last week, so you’re definitely going to have fund managers jumping on board trying to ride that wave a little bit higher.”

The API was also said to report gasoline supplies rose 949,000 barrels last week, while stockpiles at the key pipeline hub in Cushing, Oklahoma, increased by 260,000 barrels.

A Bloomberg forecast expects the Energy Information Administration on Wednesday will report a 150,000-barrel decline for last week.