- Dollar pares loss after falling to 9-month low against peers
- Nationwide inventories rose to highest level since 1930: EIA
Oil closed near $38 a barrel in New York, little changed from Wednesday, as investors assessed the impact of a weaker dollar, rising OPEC output and ample U.S. stockpiles.
The Bloomberg Dollar Index, which tracks the currency against major peers, was down 0.1 percent, after sinking 0.6 percent. A weaker dollar boosts the appeal of commodities as a store of value. U.S. oil supplies are at the highest level since 1930 after rising seven consecutive weeks, worsening a global glut. OPEC crude output rose by 64,000 barrels this month, a Bloomberg survey showed.
"The longs are losing their grip on the market," said Gene McGillian, a senior analyst and broker at Tradition Energy in Stamford, Connecticut. "We still have a big glut and will need to see supplies tighten before there are further gains."
Oil climbed 14 percent in March after rebounding from a 12-year low last month amid speculation the global surplus will ease as U.S. output declines. Saudi Arabia, Russia, Qatar and Venezuela agreed in February they would cap production at January levels if other producers followed suit to tackle the oversupply. They’ll meet with other countries in Doha on April 17.
West Texas Intermediate for May delivery rose 2 cents to settle at $38.34 a barrel on the New York Mercantile Exchange. Prices touched $37.57 earlier, the lowest level since March 16. Futures advanced 3.5 percent this quarter.
Brent for May settlement, which expires Thursday, rose 34 cents, or 0.9 percent, to $39.60 a barrel on the London-based ICE Futures Europe exchange. Prices advanced 10 percent this month and 6.2 percent this quarter. The more-actively traded June contract gained 28 cents to $40.33. The global benchmark crude closed at a $1.26 premium to WTI.
U.S. crude inventories expanded by 2.3 million barrels to 534.8 million last week, data from the Energy Information Administration showed Wednesday. Supplies at Cushing, Oklahoma, the delivery point for WTI and the nation’s biggest oil-storage hub, dropped by 272,000 barrels. Imports fell, while production slid for a third week to 9.02 million barrels a day.
The Organization of Petroleum Exporting Countries boosted production by 0.2 percent to 33.09 million a day this month, according to a Bloomberg survey of oil companies, producers and analysts. Iranian output rose by 100,000 barrels a day to 3.2 million, the most since May 2012. Sanctions against the nation, which were strengthened in July 2012, were lifted in January.
"The market is shrugging off the upcoming meeting because without the participation of some countries that have every incentive to increase production they will have a hard time agreeing to anything," said Rob Haworth, a senior investment strategist in Seattle at U.S. Bank Wealth Management, which oversees $128 billion of assets.
Twelve oil-producing nations have confirmed they’ll attend talks in Qatar next month, the country’s Energy Ministry said in an e-mail.
Production freeze and oil-market news:
- Ecuador and Venezuela would support a cut to output at the meeting between major exporters in Doha next month, Ecuador’s Oil Minister Carlos Pareja said in a post on the ministry’s Twitter account.
- Oman will attend the meeting, according to a person familiar with policy who asked not to be identified.
- China may pass the U.S. as the world’s largest crude importer in 2016, according to Unipec Vice President Fuliang Zhong.
- Eni SpA started pumping crude through a pipeline in Nigeria as production resumed following an act of sabotage on March 24, according to the company.