December 19, 2017 10:30 AM, EST

Oil Trades Near $57 as US Crude Stockpiles Seen Extending Drop

Pumping jacks stand near an Anadarko Petroleum Corp. oil rig site in Fort Lupton, Colo. Jamie Schwaberow/Bloomberg News

Oil traded near $57 a barrel for a third day before data expected to show that surplus crude inventories in the U.S. continued to diminish as global markets rebalance.

Futures rose 0.7% in New York after slipping 0.2% on Dec 19. Inventories probably lost 3 million barrels last week, according to a Bloomberg News survey before Energy Information Administration data Dec. 20. Nigerian oil workers suspended strike action and agreed to continue talks next month, while output from a Libyan field returned to normal after a power outage.

Oil has rallied the past three months as the Organization of Petroleum Exporting Countries and its allies reduce supply to drain a global glut. The unprecedented cooperation among producers, which has now been extended until the end of 2018, has crude prices on their way to a second annual advance.

“As long as the agreement between Saudi Arabia and Russia holds to curb production, oil prices will stay in the region of $60,” Paolo Scaroni, vice-chairman of NM Rothschild & Sons and former chief executive officer of Eni SpA, said in a Bloomberg television interview on Dec. 19. “Oil prices are also OK for the shale-oil producers, which need a price of around $60 if they want to make some money. In total, the situation is stable.”

West Texas Intermediate for January delivery, which expires Dec. 19, added 37 cents to $57.53 a barrel on the New York Mercantile Exchange. Total volume traded was about 52% below the 100-day average. The more-active February futures rose 34 cents to $57.56 at 12:58 p.m. in London.

Brent for February settlement rose 30 cents to $63.71 a barrel on the London-based ICE Futures Europe exchange after rising 0.3% on Dec. 18. The global benchmark traded at a premium of $6.13 to February WTI.

U.S. crude stockpiles at Cushing, Okla., the delivery point for WTI and the nation’s biggest oil-storage hub, probably fell by 2.2 million barrels last week, according to a forecast compiled by Bloomberg. That would be a sixth weekly drop, the longest run since July, according to EIA data.

Oil-market news:

•Custom parts to repair the Forties Pipeline System “have now been fabricated and are being delivered to the site over the coming days,” operator Ineos said in a statement.

•Shale output at major U.S. fields is projected to reach 6.41 million barrels a day next month, according to the EIA’s monthly Drilling Productivity Report. The EIA boosted its December estimate to 6.31 million a day.

With assistance by Francine Lacqua, and Ben Sharples