Oil Trades Below $47 as Rising U.S. Supplies Seen Expanding Glut

oil storage tanks minah raysut salalah port
(c) Robert Almeida

By Ben Sharples

(Bloomberg) — Oil traded below $47 a barrel as forecasts for rising U.S. crude stockpiles bolstered speculation that a global glut that spurred a price collapse may persist.

Futures were little changed in New York. Crude supplies in the U.S., the world’s biggest oil consumer, probably expanded by 2.4 million barrels last week, according to a Bloomberg News survey before government data on Jan. 22. Current prices should slow the nation’s output growth in the second half of the year, Pulitzer Prize-winning oil historian Daniel Yergin said.

Oil slumped almost 50 percent last year as the U.S. pumped crude at the fastest rate in more than three decades and the Organization of Petroleum Exporting Countries resisted calls to curb supply. BHP Billiton Ltd. will cut the number of active drill rigs in the U.S. by about 40 percent amid the price drop.

West Texas Intermediate for March delivery was at $46.78 a barrel in electronic trading on the New York Mercantile Exchange, up 31 cents at 11:12 a.m. Sydney time. The February contract expired on Jan. 20 after falling $2.30 to $46.39. The volume of all futures traded was about 84 percent above the 100- day average.

Brent for March settlement slid 85 cents, or 1.7 percent, to $47.99 a barrel on the London-based ICE Futures Europe exchange on Tuesday. The European benchmark crude ended the session at a premium of $1.52 to WTI for the same month.

Copyright 2015 Bloomberg.