By Adedapo Adesanya
The prices of the two crude oil benchmarks at the global market closed mixed on Tuesday, November 2 ahead of weekly US supply reports, which are expected to show a rise in crude inventories as traders also looked toward a meeting of the Organisation of the Petroleum Exporting Countries and allies led by Russia (OPEC+) on Thursday.
At the market yesterday, the price of the Brent crude rose by one cent or 0.01 per cent to trade at $84.72 per barrel, while the United States West Texas Intermediate (WTI) crude dropped 94 cents or 1.12 per cent to sell at $82.97 per barrel.
The American Petroleum Institute (API) on Tuesday reported its sixth straight week of crude oil inventory builds as it estimated the inventory build for crude oil to be 3.594 million barrels but the country’s Cushing inventory have already drawn more than 30 million barrels so far this year.
Despite the six weeks of builds, US crude inventories are still 57 million barrels below where they were at the beginning of the year.
Analyst expectations for the week were for a build of 1.567-million barrels for the week.
In the previous week, the API reported a build in oil inventories of 2.318-million barrels, compared to the 1.650-million-barrel build that analysts had predicted.
The market will now anticipate the official data from the US Energy Information Administration (EIA) on Wednesday.
Brent’s price has surged more than 60 per cent in 2021 and it hit a three-year high of $86.70 last week as global demand has recovered and OPEC+ has been slow to unwind record output cut even as consuming countries have pressured the group to do more to cool the market.
The alliance will meet tomorrow but the market is not under any pressure as it is expected that they will stick to a plan for gradual, monthly production increases of 400,000 barrels per day.
Oil prices also continue to gain support as preliminary data found that the October increase in OPEC’s output undershot the planned rise due to involuntary outages in some producers.
With output undershooting the planned increase last month, OPEC’s compliance with its pledged cuts increased to 118 per cent in October the survey found, from 114 per cent a month earlier.
OPEC+ is relaxing output cuts made in 2020 as demand recovers from the coronavirus pandemic and with countries like Nigeria not delivering as it should due to a lack of capacity, the alliance is wary of pumping too much oil in case of renewed setbacks in the battle against COVID-19.
