Investing.com-- Oil prices rose sharply Wednesday, shrugging off unexpected increase in U.S crude stockpiles amid further supply disruptions just a day ahead of an OPEC+ meeting to decide on future output policy.
By 14:30 ET (19:30 GMT), the U.S. crude futures settled 1.9% higher at $77.86 a barrel and the Brent contract climbed 1.7% to $83.10 a barrel.
U.S. weekly stockpiles spring upside surprise
U.S. weekly crude stockpiles rose by roughly 1.6M barrels in the week ended Nov. 14, confounding expectations of a draw of about 933,000 barrels.
Gasoline inventories, one of the products that crude is refined into, rose by roughly 1.8M barrels, well above expectations of a build of 229,000 barrels while distillate stockpiles jumped by 5.2M barrels, compared with expectations for a fall of 394,000 barrels.
Supply disruptions help crude prices
A severe storm in the Black Sea region has reportedly disrupted up to 2 million barrels per day of oil exports from the region, as it resulted in Kazakhstan’s three biggest oil fields cutting output by 56%.
Additionally, the oil market also found support from a drop in U.S. crude inventories, with stocks falling by 817,000 barrels last week, according to data from industry body American Petroleum Institute.
Official data is scheduled for release later in the session, and if this draw is confirmed it comes after a bumper, 8.7 million build in the week before. U.S. inventories had seen four straight weeks of builds as fuel demand appeared to be cooling with the winter season.
Output cuts in focus ahead of OPEC+ meeting looms large
Hopes of potential output cuts by major oil producers were boosted ahead of the Organization of the Petroleum Exporting Countries and allies, including Russia, meeting due Thursday, were boosted by a Wall Street Journal report Wednesday, suggesting that a cut of as much as 1 million barrels a day was under consideration.
Saudi Arabia, Russia and other members of OPEC+ have already pledged total oil output cuts of about 5 million barrels per day (bpd), about 5% of daily global demand, in a series of steps that started in late 2022.
This includes Saudi Arabia's additional voluntary production cut of 1 million bpd, which is due to expire at the end of December, and a Russian export cut of 300,000 bpd until the end of the year.
(Peter Nurse and Ambar Warrick contributed to this report)