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Oil steady ahead of official U.S. inventory data

Published 03/09/2021, 09:25 PM
Updated 03/10/2021, 07:00 AM
© Reuters. Views of Total Grandpuits oil refinery
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By Bozorgmehr Sharafedin

LONDON (Reuters) - Oil prices were steady on Wednesday, supported by an OECD forecast for the global economic recovery and by OPEC+ oil output curbs but held in check by rising U.S. inventories.

Brent crude fell 3 cents, or less than 0.1%, to $67.49 a barrel by 1137 GMT and U.S. West Texas Intermediate crude rose 10 cents, or 0.2%, to $64.11.

The pandemic-hit global economy is set to rebound with 5.6% growth this year and expand 4% next year, the Organisation for Economic Cooperation and Development (OECD) said in its interim economic outlook. Its previous forecast had been for growth of 4.2% this year.

"When it comes to lifting market sentiment, there is very little that can rival an upgrade to the post-COVID economic recovery," said Stephen Brennock of broker PVM.

Prices also gained support from the decision by the OPEC+ producer group to largely maintain production cuts in April.

"In our view, the March 4 OPEC+ meeting has not just left the door to higher prices open, it has taken that door off its hinges and chopped it up for firewood," Standard Chartered said in a note.

Saudi Foreign Minister Prince Faisal bin Farhan Al Saud on Wednesday that Saudi Arabia and Russia were keen for fair oil prices and will continue their cooperation in the framework of the OPEC+ group.

However, prices remained under pressure from a combination of factors including top importers China and India drawing crude from storage at current high prices and expectations of a return of Iranian supplies, analysts said.

U.S. crude inventories rose by 12.8 million barrels in the week to March 5, trading sources said, citing data from industry group the American Petroleum Institute. Analysts polled by Reuters had expected a build of about 800,000 barrels.

Official figures from the Energy Information Administration (EIA) are due later on Wednesday.

© Reuters. Views of Total Grandpuits oil refinery

Higher prices are expected to bring more U.S. supplies back online. However, U.S. crude production is still expected to fall by 160,000 barrels per day (bpd) in 2021 to 11.15 million bpd, the EIA said on Tuesday. Its previous monthly forecast was for a drop of 290,000 bpd.

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