Saturday , October 16 2021

OPEC offer cuts, US oil stocks in focus

Pumpjacks of oil in the Permian basin oil field are beginning to work as the crude oil price increase.

Spencer Platt | Getty Images

Oil prices fell on Wednesday, weighed down by a weaker oil demand outlook and an increase in US crude stocks, despite rising expectations of OPEC-led supply cuts.

Brent oil futures, the international benchmark for oil prices, fell 76 cents, or 1.22%, to $ 61.53 a barrel at 0036 GMT.

West Texas Intermediate (WTI) crude oil futures fell 79 cents, or 1.3 percent, to $ 52.58 a barrel.

The US Energy Information Administration (EIA) cut its forecasts for the growth of world oil demand in 2019 and US crude production in a monthly report released on Tuesday.

It slashed its forecast for world oil demand growth in 2019 to 1.22 million bpd, although it also delayed its 2019 forecast to 12.32 million bpd, down 140,000 bpd from its May forecast.

A surprising rise in US oil inventories has also kept oil prices under pressure.

"Investors are concerned about the recent increase in inventories in the US," the ANZ bank said in a statement.

US crude oil stocks unexpectedly jumped 4.9 million barrels in the week ended June 7 to 482.8 million barrels, according to data from the American Petroleum Institute (API) on Tuesday. This compared with analysts' expectations for a decrease of 481,000 barrels.

Official data from the Energy Information Administration (EIA) should be delivered at 10:30 am (14:30 GMT) on Wednesday.

With the next OPEC meeting a few weeks away, the market is eyeing whether the world's largest oil producers would prolong their supply cuts.

The Organization of Petroleum Exporting Countries (OPEC) and some non-members, including Russia, have limited their oil production by 1.2 million barrels a day since the beginning of the year in an attempt to raise prices.

Arab Energy Minister Suhail bin Mohammed al-Mazroui said on Tuesday that OPEC members are close to agreeing on continued production cuts.

OPEC is due to meet on June 25, followed by talks with its allies led by Russia on June 26. But Russia has suggested a date change for July 3 to 4, group sources told Reuters.

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