On Thursday, crude oil gained support from OPEC+’s plans to postpone production jumps, easing to 2.20 million barrels per day (bpd) over the following months.
West Texas Intermediate crude contracts for October delivery jumped by 0.17% to $69.27 per barrel. Also, Brent futures for November shipments increased by 0.17% to $72.81 a barrel on September 05’s Asian afternoon session.
According to OPEC+ sources, the fuel alliance aims to accelerate its production by 180,000 bpd in October. Reports added that the output hike was held back by two months.
The 2.20 million bpd cut implemented over the second and third quarters will expire at the end of the month. Furthermore, Algeria, Iraq, Kazakhstan, Kuwait, and four other countries led the voluntary reduction, which was beyond the official policy of the oil cartel’s coalition.
Moreover, the OPEC Secretariat confirmed that the eight nations would discuss the planned production decrease on Thursday. In addition, the phaseout of crude oil curbs will start in December and extend to November 2025.
Based on OPEC+’s official policy, the group will produce an accumulated 39.725 million bpd next year. Also, voluntarily, a subset of its members is separately curbing outputs by an additional 1.70 million bpd in 2025.
EIA Reports Oil Inventory Decline
The US Energy Information Administration (EIA) reported an inventory outlook of a steeper oil decline of 6.90 million barrels.
Moreover, the American Petroleum Institute (API) stated its inventory estimate, showing a significant drop of 7.40 million barrels in the last week of August. On the other hand, analysts expected a draw of around a million barrels.
Meanwhile, the EIA forecasted a supply decline of 400,000 barrels in middle distillates, producing 5.20 million barrels daily. Earlier this week, the API data furthered higher oil prices, and the EIA’s figures are likely to reinforce them.
Another bullish factor for crude prices is OPEC+’s output decline after an expected reversal has pressured the fuel costs.
