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Oil futures climbed on Wednesday, buoyed by a report that said major oil producers in OPEC+ may consider extending their voluntary production cuts into the second quarter.
Data from the Energy Information Administration, meanwhile, revealed a fifth straight weekly rise in U.S. crude inventories, along with inventory declines for gasoline and distillates.
Price moves
-
West Texas Intermediate crude
CL00,
+0.08%
for April delivery
CL.1,
+0.08% CLJ24,
+0.08%
rose 23 cents, or 0.3%, to $79.10 a barrel on the New York Mercantile Exchange. -
April Brent crude
BRNJ24,
+0.18% ,
the global benchmark, was up 39 cents, or 0.5%, at $84.04 a barrel on ICE Futures Europe. May Brent
BRN00,
-0.08% BRNK24,
-0.08% ,
the most actively traded contract, added 18 cents, or 0.2%, at $82.84 a barrel on ICE Futures Europe. -
March gasoline
RBH24,
-1.07%
shed 0.5% to $2.3337 a gallon, while March heating oil
HOH24,
-2.09%
lost 1.5% to $2.704 a gallon. -
Natural gas for April delivery
NGJ24,
+2.82%
traded at $1.865 per million British thermal units, up 3.1% on its first full trading day as a front-month contract.
Market drivers
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. The voluntary reductions expire at the end of the first quarter and the report said a decision on an extension is expected in the first week of March.
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.
“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, noting that 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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On U.S. Wednesday, the EIA reported that U.S. commercial crude inventories rose by 4.2 million to 447.3 million barrels for the week ending Feb. 23.
On average, analysts had expected the report to show an increase of 2 million barrels, according to a survey conducted by S&P Global Commodity Insights. Tuesday, the American Petroleum Institute reported a crude inventory rise of 8.4 million barrels, according to a source citing the data.
The EIA report also revealed weekly supply declines of 2.8 million barrels for gasoline and 500,000 barrels for distillates. The S&P Global Commodity Insights analyst survey showed forecasts for inventory declines of 2.1 million barrels for gasoline and 500,000 barrels for distillates.
U.S. oil production was unchanged in the latest week, holding at a record 13.3 million barrels a day, the EIA said, while crude stocks at the Cushing, Okla., Nymex delivery hub were up 1.5 million barrels at 31 million barrels.
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