Oil prices rose more than $1 a barrel on Wednesday as investors focused their attention on an upcoming OPEC+ output policy meeting and looked past a jump in U.S. crude, gasoline and distillate stockpiles.
Brent crude futures were up $1.01, or 1.2 per cent, to $82.69 a barrel by 1:34 p.m. ET (1834 GMT). U.S. West Texas Intermediate (WTI) crude futures gained $1.16, or 1.5 per cent, to $77.57 a barrel.
Prices were lifted by a media report that the OPEC+ group, made up of the Organization of the Petroleum Exporting Countries and allies such as Russia, was considering new oil production cuts of as much as 1 million barrels a day, traders said.
The OPEC+ policy meeting is scheduled for Thursday and news surrounding its outcome is likely to be the main driver for oil price fluctuations in the near-term, UBS analyst Giovanni Staunovo said. Oil benchmarks had gained about 2 per cent on Tuesday as traders anticipated that OPEC+ would extend or deepen supply cuts.
“All eyes are on the Nov. 30 OPEC meeting, and the fine details will matter,” CFRA analyst Stewart Glickman said.
The Energy Information Administration reported a surprise build in U.S. crude oil and distillate fuel stocks last week, indicating weak demand. Gasoline stocks also rose by more than expected, the data showed.
However, the impact of those builds was neutralized by large draws in other refined products, like residual fuel oil, Staunovo said.
A severe storm in the Black Sea region has disrupted up to 2 million bpd of oil exports from Kazakhstan and Russia, according to state officials and port agent data, raising the prospect of short-term supply tightness.
Kazakhstan’s largest oilfields are cutting combined daily oil output by 56 per cent from Nov. 27, the Kazakh energy ministry said.