Oil headed for the biggest quarterly advance in seven years as falling U.S. supply added to speculation the global oversupply is easing.
Futures have risen 29 percent this quarter in New York, the biggest gain since June 2009. U.S. crude stockpiles dropped to the lowest since March and output fell a third week, the Energy Information Administration said Wednesday. Oil has been whipsawed after the U.K.’s vote to leave the European Union and slipped Thursday as Goldman Sachs Inc. said a recovery in Nigerian supply is a risk to its $50 a barrel forecast for the second half of the year.
Supply disruptions and falling U.S. output have helped cut a global surplus, sparking a rally of more than 85 percent since prices hit a 12-year low in February. Both the International Energy Agency and the Organization of Petroleum Exporting Countries forecast this month that the market is heading toward balance as demand growth outpaces supply.
“The global crude market has been rebalancing with slowing production and rising demand in the second quarter,” Hong Sung Ki, a Seoul-based commodities analyst at Samsung Futures Inc., said by phone. “Crude demand forecasts will have be adjusted following the Brexit and this increases volatility in the market as it tries to rebalance itself.”
West Texas Intermediate fell as much as 61 cents, or 1.2 percent, to $49.27 a barrel on the New York Mercantile Exchange and traded at $49.44 at 11:49 a.m. Seoul time. Prices climbed $2.03 to settle at $49.88 on Wednesday, the highest since June 23. Total volume traded was 44 percent below the 100-day average.
Brent for August settlement, which expires Thursday, lost as much as 61 cents, or 1.2 percent, to $50 a barrel on the London-based ICE Futures Europe exchange. Prices are up 26 percent this quarter. The more-active September contract fell 53 cents to $50.79 a barrel. The global benchmark crude traded at a 56-cent premium to WTI for August.
U.S. crude inventories dropped to 526.6 million barrels, the lowest since the week ended March 11, EIA data show. Supplies climbed to an 87-year high of 543.4 million barrels in the last week of April. Production slipped by 55,000 barrels a day to 8.62 million last week, the lowest since September 2014, the EIA said.
Copyright 2016 Bloomberg News.