October 30, 2024

Oil prices rose more than 2% on Wednesday after Reuters reported that OPEC+ could delay a planned oil production increase in December by a month or more because of concern over soft oil demand and rising supply.

Brent crude futures gained $1.10, or 1.6%, to $72.22 a barrel by 1418 GMT. U.S. West Texas Intermediate crude gained $1.07, also 1.6%, to $68.28. Both contracts rose by more than 2 % earlier in the session.

OPEC+, which groups the Organization of the Petroleum Exporting Countries (OPEC) and allies such as Russia, is scheduled to raise output by 180,000 barrels per day (bpd) in December.

The group has cut output by 5.86 million bpd, equivalent to about 5.7% of global oil demand.

“OPEC+ has always advised that the unwinding of voluntary supply cuts would be subject to market conditions,” said Harry Tchilinguirian, head of research at Onyx Capital Group

“That they may be reconsidering the timing of a return of their barrels is not surprising given the weak macroeconomic realities, particularly in China, which have led to downward revisions in global demand growth estimates.”

A decision to postpone the increase could come as early as next week, two OPEC+ sources told Reuters.
OPEC+ is scheduled to meet on Dec. 1 to decide its next policy steps.

An expected fall in U.S. inventories also boosted prices.

U.S. crude oil and fuel stocks fell last week, market sources said on Tuesday, citing American Petroleum Institute figures.

Crude stocks dipped by 573,000 barrels in the week ended Oct. 25, the sources said, while gasoline inventories lost 282,000 barrels and distillate stocks fell by 1.46 million barrels.

Nine analysts polled by Reuters had expected crude inventories to rise by 2.2 million barrels.

REUTERS