©2015 Bloomberg News
NP1G6B6K50Y0

(Bloomberg) — Oil pared its biggest three-day decline since March before U.S. government data forecast to show crude stockpiles shrank for a fourth week.

Futures gained as much as 0.6 percent in New York. Crude inventories probably dropped by 2 million barrels through May 22, a Bloomberg survey showed before an Energy Information Administration report Thursday. Russia’s Energy Minister Alexander Novak met with his Venezuelan counterpart in Moscow as he sought to discuss the global market with OPEC officials before the group’s June 5 meeting.

Oil’s recovery from a six-year low is faltering near $60 a barrel amid speculation that a supply glut will persist as rising prices drive an expansion in U.S. production. Crude stockpiles in the world’s largest consumer are near the highest level in 85 years and 100 million barrels above the five-year average for this time of the year, according to the EIA.

“Any draw in crude inventories will be taken as a positive and spur buying,” Michael McCarthy, a chief strategist at CMC Markets in Sydney, said by phone. “If we do see a build in the official data, given where those expectations are sitting, we could see a test of the lower end of the trading range around $56 a barrel.”

West Texas Intermediate for July delivery rose as much as 36 cents to $57.87 a barrel in electronic trading on the New York Mercantile Exchange and was at $57.79 at 12:11 p.m. Sydney time. The contract fell 5.3 percent in the past three sessions, the most since March 31. Total volume was about 68 percent below the 100-day average. Prices are down 3.1 percent this month.

U.S. Supplies

Brent for July settlement climbed as much as 60 cents, or 1 percent, to $62.66 a barrel on the London-based ICE Futures Europe exchange. It slid $1.66 to $62.06 on Wednesday. The European benchmark crude traded at a premium of $4.74 to WTI.

U.S. crude inventories decreased to 482.2 million barrels through May 15, according to the EIA. Supplies remain near the highest level since 1930, based on monthly records from the Energy Department’s statistical arm dating back to 1920.

Stockpiles expanded by 1.3 million barrels last week, the American Petroleum Institute reported Wednesday, according to ForexLive. Supplies at Cushing, Oklahoma, the delivery point for WTI contracts and the nation’s biggest oil-storage hub, shrank by 72,000 barrels, according to the industry group in Washington.

OPEC Production

Novak discussed the market situation and mutual projects with Venezuela’s Oil Minister Asdrubal Chavez on Wednesday, the ministry in Moscow said on its website. Venezuela is among the 12 members of the Organization of Petroleum Exporting Countries, which agreed in November to maintain their collective output target at 30 million barrels a day.

OPEC, which pumps about 40 percent of the world’s oil, exceeded its quota for an 11th consecutive month in April, according to data compiled by Bloomberg. At the June 5 meeting, the group will probably stick with its strategy of favoring market share over supporting prices, a separate Bloomberg survey of analysts and traders shows.

The tanker market is signaling oil’s rally may be under threat. A surge in demand for supertankers drove benchmark charter rates 57 percent higher in the two weeks to May 20. OPEC will have almost half a billion barrels of oil in transit to buyers at the start of June, the most this year, while analysts estimated about 20 million is being stored on ships.

To contact the reporter on this story: Ben Sharples in Melbourne at bsharples@bloomberg.net To contact the editors responsible for this story: Yee Kai Pin at kyee13@bloomberg.net Glenys Sim