Oil futures traded near unchanged Wednesday, with investors looking ahead to official data on U.S. inventories for signs a storage crisis is easing.
West Texas Intermediate crude CL.1, +0.03% CL00, +0.19% for June delivery on the New York Mercantile Exchange was up 1 cent at $26.34 a barrel. The global benchmark, July Brent BRN00, +0.96% was off 2 cents at $29.96 a barrel on ICE Europe.
“Concerns over hitting storage capacity have eased, as we see demand gradually recovering, along with supply cuts hitting the market,” said Warren Patterson, head of commodities strategy at ING, in a note.
The American Petroleum Institute, an industry trade group, reported late Tuesday that U.S. crude supplies rose by 7.6 million barrels for the week ended May 8, according to sources. But the data also showed that inventories at Cushing, Oklahoma, the delivery hub for Nymex futures, declined by about 2.3 million barrels.
Dwindling storage capacity in Cushing was blamed in large part for driving the expiring May WTI contract into negative territory for the first time in history last month. The COVID-19 pandemic has destroyed demand for crude, contributing to a global glut.
The API data also reportedly showed gasoline stockpiles edged down by 1.9 million barrels, while distillate inventories climbed by 4.7 million barrels. More closely followed data from the Energy Information Administration is due later Wednesday. The EIA figures are expected to show crude inventories rose by 4.8 million barrels last week, according to analysts polled by S&P Global Platts. They also forecast a supply decline of 2.5 million barrels for gasoline and a stockpile increase of 4.1 million barrels for distillates.
The head of the International Energy Agency warned demand for the commodity could remain below pre-coronavirus levels for another year. The IEA, which forecast that demand will decline by about 9 million barrels a day on average this year, is set to update its outlook for markets on Thursday.
Later this morning OPEC publishes its monthly report.