Oil futures rose Wednesday, finding support following a report that the Organization of the Petroleum Exporting Countries and its allies were considering rolling over production cuts into April instead of easing them.
Traders had been looking for the group, known as OPEC+, to ease output curbs in April, allowing production to rise by around 500,000 barrels a day. Reuters on Wednesday reported that some OPEC+ members had argued for maintaining existing curbs into April amid worries over fragile demand.
The report said it was unclear whether Saudi Arabia, which unilaterally cut production 1 million barrels a day in February and March, would extend its reduction. Meanwhile, Bloomberg reported that OPEC+ was poised to go ahead with production increases.
In the “game of back and forth, now I’d expect any increase above 500,000 [barrels a day] to be an incremental negative for oil,” said Stephen Innes, chief global market strategist at Axi, in a note.
“ While Saudi may choose to delay the return of their 1mb/d unilateral cut, it seems likely that the high oil price will embolden Russia and others to push for the return of more than 500,000 b/d, so I think there’s a greater probability of tomorrow’s OPEC+ meeting being negative as opposed to a positive catalyst,” he said.
West Texas Intermediate crude for April delivery CL.1, +1.52% CLJ21, +1.52% rose 71 cents, or 1.2%, to $60.46 a barrel on the New York Mercantile Exchange. May Brent crude BRN00, +1.37% BRNK21, +1.37%, the global benchmark, was up 65 cents, or 1%, at $63.35 a barrel on ICE Futures Europe.
The American Petroleum Institute reported late Tuesday that U.S. crude supplies rose by nearly 7.4 million barrels for the week ended Feb. 26, according to sources. The data also reportedly showed gasoline stockpiles fell by 9.9 million barrels, while distillate inventories also declined by about 9.1 million barrels.
More closely followed inventory data from the Energy Information Administration will be released Wednesday. On average, the EIA is expected to show crude inventories up by 1.3 million barrels, according to a survey of analysts conducted by S&P Global Platts. The survey also shows expectations for inventory declines of 2.9 million barrels for gasoline and 3.9 million barrels for distillates.