Oil steady before U.S. inventories EIA data

Oil prices were steady on Wednesday, supported by an OECD forecast for the global economic recovery and by OPEC+ output curbs, but held in check by rising U.S. inventories.

Brent crude fell 2 cents, or less than 0.1 per cent, to $67.50 a barrel by 0943GMT. US West Texas Intermediate crude rose 11 cents, or 0.2 per cent, at $64.12 a barrel.

The world economy is set to rebound this year with 5.6 per cent growth and expand four per cent next year, the Organisation for Economic Cooperation and Development said in its interim economic outlook. Its previous forecast had been for growth of 4.2 per cent this year.

“When it comes to lifting market sentiment, there is very little that can rival an upgrade to the post-Covid economic recovery,” said Stephen Brennock of broker PVM.

Prices also gained support from the Opec+ decision to largely maintain production cuts in April.

“In our view, the 4 March Opec+ meeting has not just left the door to higher prices open, it has taken that door off its hinges and chopped it up for firewood,” said Standard Chartered in a note.

However, prices remained under pressure from a combination of factors including top importers China and India drawing crude from storage at current high prices and expectations of a return in Iranian supplies, analysts said.

In the United States, crude inventories rose by 12.8 million barrels in the week to March 5, according to trading sources, citing data from industry group the American Petroleum Institute. Analysts had expected a build of about 800,000 barrels in a Reuters’ poll.

Official figures from the Energy Information Administration (EIA) are expected Wednesday at 10:30am ET.

Higher prices are expected to bring more US crude supplies back online. US crude production is still expected to fall by 160,000 barrels per day (bpd) in 2021 to 11.15 million bpd, the EIA said on Tuesday, but that’s a smaller decline than its previous monthly forecast for a 290,000-bpd drop. — Reuters