Oil futures pushed higher Wednesday, finding support after the Organization of the Petroleum Exporting Countries and its allies stuck with plans to continue gradually easing production curbs, signaling confidence in the demand outlook despite a surge in COVID-19 cases in India.
West Texas Intermediate crude for June delivery rose 54 cents, or 0.9%, to $63.48 a barrel on the New York Mercantile Exchange. June Brent crude the global benchmark, rose 45 cents, or 0.7%, to $66.87 a barrel on ICE Futures Europe. July Brent the most actively traded contract, was up 52 cents, or 0.8%, at $66.39 a barrel.
OPEC and its allies, a group known as OPEC+, decided Wednesday to stick with a plan to gradually relax output curbs beginning next month.
“The market clearly views this decision as positive, as Brent is making a renewed bid for the next important threshold, namely $67 per barrel,” said Eugen Weinberg, analyst at Commerzbank, in a note. “However, in our view there is definitely a risk that the increases in OPEC+ production by over 2.1 million barrels in the coming three months could result in a supply surplus given the restrictions in place in major oil importing countries such as India, Japan and Turkey.”
Oil bulls were also shaking off industry data that showed a rise in U.S. crude inventories.
The American Petroleum Institute reported late Tuesday that U.S. crude supplies rose by 4.3 million barrels for the week ended April 23, according to sources. The data also reportedly showed gasoline stockpiles down by 1.3 million barrels, while distillate inventories declined by 2.4 million barrels.
More closely followed inventory data from the Energy Information Administration is set for release Wednesday morning. On average, the EIA is expected to show crude inventories down by 200,000 barrels, according to survey of analysts conducted by S&P Global Platts. It also forecast unchanged inventories of gasoline and a supply decrease of 1.2 million barrels for distillates.