* Stockpiles may have lost 3.9 million barrels last week: survey
* WTI futures climb 54 cents to $74.39 a barrel in New York
By Tsuyoshi Inajima and Grant Smith
Oil advanced above $74 a barrel as U.S. crude stockpiles were seen shrinking at a time when supply disruptions from Libya to Iran and beyond are straining global markets.
Futures in New York were up 0.7 percent on Tuesday after a 1.3 percent gain in the previous two sessions. A U.S. government report on Wednesday will show crude inventories fell for the fourth time in five weeks, according to a Bloomberg survey of analysts. Meanwhile, Libya warned its output could keep declining amid port closures, and Iran’s customers in Asia signaled they’re shying away from the nation’s crude because of U.S. political pressure.
The “Libyan outage could not have come at a worse time,” said Michael Cohen, a research analyst at Barclays Plc. “With the situation in Libya worsening and the State Department’s entreatment to Iranian oil importers to ‘go to zero,’ the balance of the year might appear even tighter than a month ago.”
Oil is trading near the highest levels since 2014 as output disruptions and impending sanctions on Tehran raise concerns of a global supply crunch. Having quit a nuclear accord with Iran in May, U.S. President Donald Trump is now pressing the country’s customers to halt purchases. Meanwhile in politically fractured Libya, exports have fallen again after a splinter group gained control of critical ports.
West Texas Intermediate crude for August delivery traded at $74.39 a barrel on the New York Mercantile Exchange, up 54 cents, at 10:21 a.m. London time. Total volume traded was in line with the 100-day average. The contract advanced 5 cents to $73.85 on Monday.
Brent for September settlement rose $1.12, or 1.4 percent, to $79.19 a barrel on the London-based ICE Futures Europe exchange, after climbing 96 cents on Monday. The global benchmark traded at a $6.53 premium to WTI for the same month.
Futures for September delivery on the Shanghai International Energy Exchange rose 1.5 percent to 504.9 yuan a barrel. The contract climbed 0.4 percent on Monday.
U.S. crude inventories probably fell by about 3.88 million barrels last week, according to the Bloomberg survey before Energy Information Administration data due Wednesday. Stockpiles in the storage hub of Cushing, Oklahoma, likely dropped by 1.3 million barrels.
Libyan output will keep falling day by day if major ports remain closed, said Mustafa Sanalla, chairman of Tripoli-based National Oil Corp. The OPEC producer is currently pumping 527,000 barrels a day, less than half its output before fighting in February forced the shutdown of an oil field in the west of the country, he said.
Meanwhile, OPEC rebutted Trump’s demand that the group should do more to temper rising gasoline prices. “It’s unfair to say that OPEC is not doing its part,” United Arab Emirates Energy Minister Suhail Al Mazrouei said. Al Mazrouei, who’s also president of the cartel, said it’s important to avoid returning to the kind of excessive supply that triggered the recent downturn.
Other oil-market news:
* A strike that broke out overnight on oil rigs and platforms off Norway shut a field operated by Royal Dutch Shell Plc as a worker union warned it will escalate the labor action over the weekend.
* Canadian crude supplies may remain tight as Suncor Energy Inc. works to bring its massive Syncrude oil-sands operation back online, a process that the company said won’t be completed until September.
* State-run producer Saudi Aramco gave full contractual crude volumes for August to at least six Asian buyers, according to traders who asked not to be identified.
* Iranian oil shipments to some U.S. allies are being threatened even before America’s Nov. 4 deadline for buyers to curb imports and comply with renewed sanctions on the OPEC member.
–With assistance from Sharon Cho.
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