Brent crude prices: Oil prices mixed as US crude inventory draw supports, OPEC+ concerns weigh

NEW YORK: Oil prices were mixed on Wednesday, supported by a draw in US crude inventories but pressured by concerns about the market’s recovery after OPEC and its allies lowered their 2021 demand growth forecast.

Brent crude for May, which expires on Wednesday, fell 23 cents, or 0.4%, to $63.91 a barrel at 11:05 a.m. EDT (1505 GMT). The more active Brent contract for June was up 18 cents, or 0.30%, at $64.36 a barrel.

US West Texas Intermediate (WTI) crude futures gained 41 cents, or 0.7%, to $60.96 a barrel.

WTI crude futures for May delivery rose 41 cents to $60.96 a barrel, a 0.7 percent gain.

US crude stocks fell unexpectedly last week as refinery runs increased, shrinking by 876,000 barrels in the last week, compared with analysts’ expectations for an increase of 107,000 barrels, the Energy Information Administration said.

“Refineries continue to increase utilization and operable capacity and recovery mode from the deep freeze,” said Tony Headrick, energy market analyst CHS Hedging, referencing a winter storm last month that froze refining operations in Texas.

OPEC+ has lowered its oil demand growth forecast for this year by 300,000 barrels per day (bpd), a report from its experts panel meeting seen by Reuters showed.

The Organization of the Petroleum Exporting Countries and allies, together called OPEC+, are set to meet on Thursday, to decide on output policy.

“Given this pessimistic outlook, it seems likely that the production quotas will be left in place for another month,” said Commerzbank analyst Eugen Weinberg.

OPEC+ are currently curbing output by just over 7 million bpd in a bid to support prices and reduce oversupply. Saudi Arabia has added to those cuts with an additional one million bpd.

“The oil market is still playing a guessing game today as to what supply policy OPEC+ will set out at tomorrow’s meeting, but the $64 per barrel Brent price signals that traders expect a cautious approach from the alliance,” said Rystad Energy’s analyst Louise Dickson.

Kuwait’s Oil Minister Oil Mohammad Abdulatif al-Fares expressed “cautious optimism” on Wednesday that global oil demand will improve as COVID-19 vaccination programmes gather pace and industrial output recovers.

OPEC oil output rose in March as higher supply from Iran countered reductions by other members under a pact with allies, a Reuters survey found, a headwind for its supply-limiting efforts if Tehran’s boost is sustained.