Oil trades near 18-month high before US inventory data

Bloomberg

Oil traded near the highest closing level in 18 months amid conflicting signs on whether the supply surplus is diminishing in the US, the world’s largest fuel consumer.
Futures slid as much as 1.1 percent in New York after climbing 6.2 percent the previous eight sessions, the longest run of gains in almost seven years. Traders faced mixed signals on US oil stockpiles after the American Petroleum Institute was said to report that US crude inventories increased by 4.2 million barrels last week, while government data due Thursday is forecast to show supplies fell.
Crude has traded near or above $50 a barrel since the Organization of Petroleum Exporting Countries agreed last month to curb production for the first time in eight years. Iraq is committed to reducing output by as much as 210,000 barrels a day from January, Oil Minister Jabbar al-Luaibi said in an interview with Kuwait’s state-run news agency Kuna.
“The oil market is in a much better state with the re-balancing process expected to pick up speed into the early part of 2017,” said Ole Sloth Hansen, head of commodity strategy at Saxo Bank A/S. “US producers are likely to respond to higher prices by increasing production but the speed of the recovery is currently up for debate.”
West Texas Intermediate for
February delivery lost as much as 60 cents to $53.46 a barrel on the New York Mercantile Exchange and was at $53.90 at 11:49 am in London.