Oil futures fell Wednesday after industry data showed a large rise in U.S. crude inventories last week ahead of official government figures.
Meanwhile, OPEC+, made up of the Organization of the Petroleum Exporting Countries and its allies, including Russia, was weighing an extension of voluntary production cuts into the second quarter, Reuters reported, citing unnamed sources. OPEC+ agreed in November to voluntary cuts of 2.2 million barrels a day in the first quarter of 2024, with Saudi Arabia rolling over its voluntary cut of 1 million barrels a day.
Price moves
-
West Texas Intermediate crude
CL00,
-1.03%
for April delivery
CL.1,
-1.03%CLJ24,
-1.03%
fell 76 cents, or 1%, to $78.11 a barrel on the New York Mercantile Exchange. -
April Brent crude
BRNJ24,
-0.90%,
the global benchmark, was off 70 cents, or 0.8%, at $82.95 a barrel on ICE Futures Europe. May Brent
BRN00,
-0.98%BRNK24,
-0.98%,
the most actively traded contract, was down 79 cents, or 1%, at $81.87 a barrel on ICE Futures Europe.
Market drivers
The American Petroleum Institute, an industry trade group, late Tuesday reported an 8.4 million barrel rise in U.S. crude inventories last week, according to a source citing the data, while gasoline stocks fell 3.3 million barrels and distillate supplies declined 523,000 barrels.
The Energy Information Administration will release official data Wednesday morning. Analysts surveyed by S&P Global Commodity Insights, on average, expected crude inventories to rise by 2 million barrels, with gasoline stocks down 2.1 million barrels and distillates showing a fall of 500,000 barrels.
“The focus is gradually shifting to the OPEC+ decision on voluntary output cuts for the second quarter of 2024,” said Ewa Manthey and Warren Patterson, strategists at ING.
“The group could announce its decision over the first week of March and expectations are that the group may extend the existing cuts considering the softer crude oil prices.
“Since announcing the voluntary cuts at the end of November 2023, ICE Brent has traded soft amid demand concerns and have just recovered recently only to November levels” of $83 a barrel, they wrote. ”The demand prospects remain muted in the short-term due to the economic slowdown and the group may need to keep cuts in place to maintain market balance.”
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