Oil Price Firms Before OPEC+ Policy Meeting
OPEC+ raise 2022 oil demand forecast, sources say United States urges OPEC+ to boost output to ease prices U.S. refineries aim to restart after Hurricane Ida
Oil prices rose on Wednesday before an OPEC+ meeting at which the producer club is expected to stick to a plan to add 400,000 barrels per day (bpd) each month to the end of December.
The Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia, collectively known as OPEC+, are set to meet at 1500 GMT. OPEC+ has raised its forecast for oil demand next year, sources within the group told Reuters, in a move that might help to build a case for raising output.
Brent crude for November delivery gained 21 cents, or 0.3%, to $71.84 a barrel by 1225 GMT. U.S. West Texas Intermediate (WTI) crude for October was up 22 cents, or 0.3%, at $68.72.
U.S. President Joe Biden’s administration has urged OPEC+ to boost output to tackle rising gasoline prices that it views as a threat to the global economic recovery.
“One foregone conclusion is that they will not add additional barrels as per Washington’s recent request. Nor will they press the pause button on easing supply curbs,” said Stephen Brennock of oil broker PVM.
“There is no reason to think (OPEC+) will rock the boat when it comes to its production strategy.”
Prices were also supported by a U.S. industry report showing that crude inventories fell more than expected last week, though much U.S. refinery capacity remains offline in the wake of Hurricane Ida.
U.S. crude stocks fell by 4 million barrels for the week to Aug. 27, according to two market sources, citing American Petroleum Institute (API) figures on Tuesday.
Ahead of the weekly Energy Information Administration report due at 10:30 a.m. EDT (1430 GMT) on Wednesday, a Reuters poll of analysts estimated crude stocks would drop by 3.1 million barrels.
However, U.S. crude prices are expected to remain under pressure as offshore oil and gas production in the Gulf of Mexico gradually recovers, though refinery operations are likely to take longer to return to normal, analysts say.