Oil firms as traders brace for supply data

London (Sept 7)  Oil futures climbed Wednesday, as traders looked ahead to key U.S. oil inventory data due later today and production developments in the lead-up to the informal meeting of major oil producing countries later this month.

On the New York Mercantile Exchange, light, sweet crude futures for delivery in October CLV6, +0.83%  advanced 41 cents, or 0.9%, to $45.25 a barrel, while November Brent crude on London’s ICE Futures exchange LCOX6, +0.87%  rose 47 cents, or 1%, to $47.73 a barrel.

Prices started cruising toward $50 a barrel earlier this week, following the announcement that Saudi Arabia and Russia had agreed to cooperate to stabilize the oil market with a production cap. But following the announcement no specific plan to cap output was unveiled, and futures have since struggled for direction amid skepticism over whether a formal deal would be forthcoming.

Later this month, a meeting by the Organization of the Petroleum Exporting Countries is set to discuss a coordinated output agreement. But several members of the group, including Iran, Nigeria and Libya, are looking to increase output from current levels and will likely be unwilling to freeze production. Gatherings of large producers in the past two years has failed to yield any coordinated agreements.

“Reactions to the news were mixed, and volatility will likely remain the name of game at least for now,” consulting firm JBC Energy wrote in a research report.

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The National Iranian Oil Company on Wednesday said the country will increase output gradually in line with customer needs and export 2.2 million barrels a day in September, according to Dow Jones Newswires. It also said it expects the oil market to rebalance in the fourth quarter 2016 or in early 2017.

Separately, the U.S. Department of Energy is set to report its weekly update on domestic oil stockpiles later Wednesday. S&P Global Platts said it expects oil inventories rose 425,000 barrels last week, as U.S. refinery utilization declined amid disruptions from Hurricane Hermine in the Gulf of Mexico.

“Crude stocks remain ample — and have risen five of the last six reporting periods — under the weight of strong imports,” according to Platts.

Nymex reformulated gasoline blendstock for October RBV6, +1.34%  — the benchmark gasoline contract — rose 1 cent to $1.333 a gallon. Natural gas NGV16, +0.59%  for the same month fell 0.5% to $2.70 per million British thermal units.

Source: MarketWatch