Oil rises on OPEC-led supply cuts, report of falling U.S. crude inventories
Oil prices rose on Wednesday after a report of declining crude inventories in the country and as producer club OPEC seemed to stick to its supply cuts despite pressure from U.S. President Donald Trump.
U.S. West Texas Intermediate (WTI) crude oil futures were at $56.02 per barrel at 0100 GMT, up 52 cents, or 0.9 percent, from their last settlement.
International Brent crude futures were at $65.55 per barrel, up 34 cents, or 0.5 percent from their last close.
U.S. crude oil inventories fell by 4.2 million barrels in the week to Feb. 22, to 444.3 million barrels, the American Petroleum Institute (API) estimated in a weekly report on Tuesday.
Official data will be released by the U.S. Energy Information Administration (EIA) after 1800 GMT.
Oil markets have generally received support this year from supply curbs by the Organization of the Petroleum Exporting Countries (OPEC), which together with some non-affiliated producers like Russia, known as OPEC+, agreed late last year to cut output by 1.2 million barrels per day (bpd) to prop up prices.
And the group has indicated it will continue to withhold supply despite pressure from U.S. President Donald Trump this week to stop artificially tightening markets.
“Crude oil has been rising lately, not due to strong growth and rising demand but primarily due to a politically orchestrated cut in production from OPEC and friends,” said Ole Hansen, head of commodity strategy at Denmark’s Saxo Bank.
Despite this, oil remains in ample supply as U.S. crude oil production has risen by more than 2 million bpd over the past year, to a record 12 million bpd, and because demand growth is low because of a global economic slowdown and improving energy efficiency across industries.
“The OPEC+ production cuts have … so far failed to create the tightness needed to support a continued rally,” Hansen said.