Crude traded near $46 a barrel in New York after a government report showed U.S. refinery demand surged and Russia’s oil minister expressed optimism that OPEC would reach a deal.
Refiners used 16.1 million barrels a day last week, up 309,000 barrels from a week earlier, according to the Energy Information Administration. Crude stockpiles rose 5.27 million barrels. A 1.5 million barrel gain was forecast by analysts surveyed by Bloomberg. Russia is ready to support an OPEC decision to stabilize the market, Energy Minister Alexander Novak said. OPEC ministers are meeting on Nov. 30 to discuss how to implement production cuts.
Oil retreated for much of the past three weeks amid skepticism about the Organization of Petroleum Exporting Countries’ ability to implement a production cut at the upcoming summit in Vienna. Officials from the group and Russia are meeting in Doha on Thursday for another round of talks without ministers from Iran and Iraq, the two countries that pose the biggest obstacle to an output accord.
“You would have expected to see more selling after such a big build in crude,” said Gene McGillian, manager of market research for Tradition Energy in Stamford, Connecticut. “There’s a feeling that OPEC will come to some sort of an agreement later this month, which makes selling risky.”
West Texas Intermediate for December delivery slipped 1 cent to $45.80 a barrel at 12:28 p.m. on the New York Mercantile Exchange, after dropping 1.7 percent earlier. Prices rose 5.8 percent to $45.81 on Tuesday, the biggest gain since April 8. Total volume traded was 52 percent above the 100-day average.
Brent for January settlement slipped 8 cents to $46.87 a barrel on the London-based ICE Futures Europe exchange. Prices rose 5.7 percent to $46.95 on Tuesday. The global benchmark traded at a 51-cent premium to January WTI.
The gain left U.S. crude supplies at 490.3 million in the week ended Nov. 11, according to EIA data. Stockpiles are at the highest seasonal level in more than 30 years.
Refineries boosted operating rates by 2.1 percentage point to 89.2 percent of capacity, the biggest gain since February. Plants usually increase operations in November as they prepare to meet winter-fuel demand.
“There was a significant recovery in refinery demand,” said Thomas Finlon, director of Energy Analytics Group in Wellington, Florida. “The fact that there was a crude build while refinery runs were growing is very bearish for the market.”