By Sarah McFarlane and Jenny W. Hsu
Oil prices were little changed Thursday ahead of weekly data on U.S. oil inventories, which are expected to shrink.
Brent crude, the global oil benchmark, rose 0.1% to $57.04 a barrel on London's ICE Futures exchange. On the New York Mercantile Exchange, West Texas Intermediate futures were trading down 0.3% at $53.91 a barrel.
According to industry group American Petroleum Institute, U.S. crude stocks could rise by 4.2 million barrels in the week ended Dec. 23, surpassing expectations. The data also showed a decrease of 2.8 million barrels in gasoline stockpiles.
Analysts surveyed by The Wall Street Journal were expecting a 1.4 million barrel decline in crude supplies. Those surveyed by S&P Global forecast a drawdown of 1.5 million barrels.
Official inventory data from the Energy Information Administration is due later today--a day later than usual due to the holidays. Last week, the EIA reported growth of 2.3 million barrels in crude stocks.
"Both the unexpected build in crude stocks for last week and the reported decline in distillate and gasoline inventories for last week appear to be tied to an unexpected, counter-seasonal 604,000 barrels a day drop in refinery crude runs," said Tim Evans, a Citi Futures analyst.
The boom of U.S. unconventional oil production has been a major threat to the Organization of the Petroleum Exporting Countries, which supplies one-third of the global oil supply. For over two years the cartel ramped up their production in a bid to protect their market shares and weed out some of their less-competitive U.S. rivals.
But analysts have said the tactic was largely unsuccessful. The increase in supplies quickly outpaced demand growth and earlier this year prices sunk to as low as $26 a barrel, leading to a number of OPEC producers suffering from tighter national budgets because of weaker oil revenues. Meanwhile, production in the U.S. abated by less than expected. Last month, OPEC abandoned that strategy and agreed to cut their productions to jump-start prices, causing oil to rally above $50 a barrel to more than 1-year highs.
"We estimate that, based on an improved crude price outlook, shale gas and oil drilling will pick up again," said consultancy JBC Energy in a research note.
Nymex reformulated gasoline blendstock--the benchmark gasoline contract--rose 0.5% to $1.68 a gallon. ICE gas oil changed hands at $503.50 a metric ton, up $3.00 from the previous settlement.
Write to Sarah McFarlane at firstname.lastname@example.org and Jenny W. Hsu at email@example.com
(END) Dow Jones Newswires
December 29, 2016 05:55 ET (10:55 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.