Oil prices climbed on Tuesday, rebounding from a sharp selloff in the beginning of the week as investors look ahead to U.S. supply data that are expected to confirm the market is tightening. Crude oil for September CLU7, +0.87% , the contract that expires at the end of trade on Tuesday, rose 31 cents, or 0.7%, to $47.68 a barrel, after slumping 2.4% on Monday. The October contract CLV7, +0.88% advanced 33 cents, or 0.7%, to $47.86 a barrel.
October Brent LCOV7, +0.97% put on 34 cents, or 0.7%, to $52 a barrel, recouping parts of its 2% slump on Monday. The weakness came as no major news emerged from a meeting between members of the Organization of the Petroleum Exporting Countries and non-cartel producers about compliance with the output-cut agreement.
Kuwait’s oil minister Essam al-Marzouq said on Kuwait TV Monday that OPEC will discuss whether to end or extend the production-cap deal at a meeting in November, according to media reports.
On Tuesday, focus shifted to the U.S., where weekly inventory data from the American Petroleum Institute are due at 4:30 p.m. Eastern Time. Analyst expect the report to show an eighth consecutive drawdown in crude inventories, which could indicate the oil market is becoming more balanced.
“U.S. crude oil stocks have been falling consistently in recent weeks. If the downtrend in oil inventories is maintained, then a bullish case can be made for oil, especially given the ongoing supply restrictions from the OPEC and Russia. The closure of Libya’s largest oil field due to a pipeline blockade may also lend prices some support in the short term,” said Fawad Razaqzada, technical analyst at FOREX.com, in a note.
The API data are followed by the official inventory report from the Energy Information Administration due on Wednesday.
S&P Global Platts said the widening spread between crude oil and Brent — now standing at more than $4 — “could likely encourage U.S. producers to export more crude oil, which could help relieve pressure on U.S. stockpiles about the time they typically rise because of easing refinery demand.”
In other energy products on Tuesday, gasoline for September RBU7, +0.93% jumped 0.8% to $1.60 a gallon, while gasoil for the same month fell 0.1% to $470.75 per metric ton.
September natural gas NGU17, +0.00% lost 0.1% to $2.96 per million British thermal units.