Oil Prices Recover on Surprise Drop in Crude Inventories
By Adedapo Adesanya
The International benchmark future, Brent Crude, recovered Tuesday’s loss to rise more than 3 percent following expectations that Organisation of the Petroleum Exporting Countries (OPEC) alliance might extend deeper cuts to oil supply when they meets on Thursday.
Brent Crude had suffered losses on Tuesday driven by a comment by President Donald Trump that the US-China trade deal might not happen until late next year.
However, by yesterday night, when Business Post monitored prices of the commodity, the future was trading up 3.73 percent or $2.27 to trade at $63.09 per barrel.
The US Benchmark, West Texas Intermediate (WTI), which gained on Tuesday, also continued trading up but much higher, by a solid 4.1 percent equivalent to $2.30 that put it at $58.40 per barrel.
This good news at the oil market on Wednesday evening followed a surprise drop in crude inventories which decreased by 4.9 million barrels for the week ending November 29 according to a Energy Information Administration (EIA) report released on Wednesday.
On the supply side, OPEC and its allies are set to meet on Thursday 5 and Friday 6 in December in the Austrian capital, Vienna.
And banking on this, oil prices may continue to receive boost with speculations hinting that an additional 400,000 barrels per day may be considered with some members willing to support this.
Business Post reports had shown that at last December’s meeting of OPEC and its allies, the group agreed to cut daily production by 1.2 million barrels to curb oversupply and push better prices.
This deal is expected to run through March 2020 and with the meeting set to kick off on Thursday, the cartel will need to decide the steps to take, with extension till June 2020 also on the table.