Futures Movers: Oil prices slip but cling to nearly 5-month highs as supply clarity awaited

Oil futures were confined to a tight range early Thursday but remained near the roughly five-month highs struck in recent sessions as bigger supply questions color trading sentiment.

Futures ended lower on Wednesday, pressured by uncertainty surrounding global crude production, despite data from a U.S. government report that revealed the first weekly decline in U.S. crude stocks in a month.

Sanctions on Venezuela and the approaching expiration of U.S. waivers for importers of Iranian oil have also contributed to supply jitters, analysts said. Chatter includes speculation that U.S. sanctions against Iran and Venezuela could get tighter, and that, in turn, could trigger an end to the OPEC+ deal, a pact between de facto cartel leader Saudi Arabia and its non-OPEC alliance, led by Russia, to curb production, analysts said.

Early Thursday, the U.S. benchmark, West Texas Intermediate crude for May delivery CLK9, -0.17% slipped 6 cents, or less than 0.1%, to $ 63.70 a barrel on the New York Mercantile Exchange. The back-and-forth action leaves futures down about 0.3% for the week to date.

June Brent crude LCOM9, -0.13% the global benchmark, lost 15 cents, or 0.2%, to $ 71.47 a barrel on ICE Futures Europe. Brent is also trading just in the red for the week so far.

“Supply concerns persist, with U.S. sanctions against Iran and Venezuela and the civil war in Libya, but the OPEC+ agreement has been the bigger factor,” said Alfonso Esparza, senior market analyst with Oanda. “The deal to limit production has stabilized prices working against rising U.S. production.”

The Energy Information Administration on Wednesday reported that U.S. crude supplies fell by 1.4 million barrels for the week ended April 12. Analysts polled by S&P Global Platts expected a rise of 1.8 million barrels, following three consecutive weeks of increases, but the American Petroleum Institute on Tuesday had reported a larger decrease of 3.1 million barrels.

Oil had pulled back earlier this week after Russia’s finance minister reportedly questioned his country’s participation in a production-cut deal led by the Organization of the Petroleum Exporting Countries that has been credited in part for a rally that has seen the U.S. benchmark surge nearly 40% since the end of last year as Brent rose more than 30%. The deal is set to expire at the end of June and OPEC and its allies have scheduled their next official meetings for June 25-26.

Renewed fighting in Libya has also raised concerns about the durability of a pickup in oil exports by the country.

On Nymex, May gasoline RBK9, +0.17%  rose less than a cent, or 0.2%, to $ 2.0448 a gallon, while May heating oil HOK9, +0.02%  fell less than a cent, or 0.1%, to $ 2.0667 a gallon.

May natural gas NGK19, -0.40%  fell 1 cent, or 0.4%, to $ 2.506 per million British thermal units. The EIA is expected to report on Thursday an increase of 90 billion cubic feet in U.S. natural-gas supplies for the week ended April 12, according to a survey of analysts from S&P Global Platts.

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