Oil prices have edged-up upon hopes that OPEC+ Group will delay a planned increase in oil supply ‘offset demand fears’ stoked by an unexpected build-up in the US crude inventories.
Brent crude futures rose by $0.22 to reach $43.97 a barrel, while US West Texas Intermediate (WTI) futures increased by $0.06 to $41.49.
Data released by the industry group the American Petroleum Institute (API) showed a rise in the US crude stocks by 4.2 million barrels in the week ending 13 November.
OANDA senior market analyst Jeffrey Halley was quoted by Reuters as stating: “The API crude inventories rose much higher than expected, which added to pressure.”
In order to handle weaker energy demand due to a second wave of the Covid-19 pandemic, Saudi Arabia called on fellow members of the Organization of the Petroleum Exporting Countries, and allies including Russia, together known as OPEC+, to be ‘flexible in responding to oil market needs’ as the group considers an oil cut extension in 2021.
Nissan Securities research general manager Hiroyuki Kikukawa was quoted by the news agency as stating: “Hopes that OPEC+ will keep existing cuts further into 2021, or even increase the cuts, underpinned prices.”
OPEC+ is currently cutting production by about 7.7Mbpd until December to support prices.
The group members are likely to delay a previously agreed plan to ramp up output by 2Mbpd from January, said Reuters, citing sources.
The group held a ministerial committee meeting on 17 November that ‘made no formal recommendation’. OPEC+ could recommend changes to production quotas during the ministers meet on 30 November and 1 December.