Oil Prices Inch Higher after U.S Tasks OPEC+ on Output

Oil Prices Inch Higher after U.S Tasks OPEC+ on Output

Oil prices inch higher following the United States President Joe Biden’s call for the Organisation of Petroleum Exporting Countries and allies (OPEC+) to boost output. Consequently, oil benchmarks gained amidst concerns over future demand and the increasing number of COVID-19 cases globally ensured price rises were limited.

Inventories of commercial crude in the US fell following an increase a week earlier as oil prices rose amid the Biden administration’s call for boost production from the Organization of the Petroleum Exporting Countries and its allies.

Oil stockpiles dropped by 400,000 barrels to 438.8 million barrels in the week ended Aug. 6, the Energy Information Administration said Wednesday. Supplies were about 6% lower than the five-year average for this time of year.

Analysts had expected a supply decline of 1.3 million, according to Investing.com. A week earlier, inventories rose by 3.6 million barrels.

West Texas Intermediate crude futures rose 1.6% to $69.41 a barrel, and Brent increased 1.3% to $71.54 a barrel on Wednesday as the Biden administration called for OPEC to raise the oil production to mitigate the increasing price of the key commodity amid the COVID-19 pandemic.

In July, OPEC had agreed to boost production by 400,000 barrels per day starting from August until the phasing out of the 5.8-million-per-day cut by the end of September 2022. However, “at a critical moment in the global recovery, this is simply not enough,” National Security Advisor Jake Sullivan said in a statement.

The EIA said gasoline supplies slid 1.4 million barrels, about 3% below the five-year average for this time of year. A week earlier, gasoline inventories dropped by 5.3 million barrels. Distillate fuel inventories increased by 1.8 million barrels but still 6% below their five-year average.

Crude imports fell by 36,000 barrels per day last week to an average of 6.4 million barrels. Imports averaged about 6.6 million barrels a day over the past four weeks, 16% above the prior-year print.

Gasoline production averaged 10 million barrels a day, down from 10.2 million barrels the week before.

In a related development, more Angolan crude was offered on the Platts window, marking one of the busiest months yet for public attempts to sell crude from Africa’s number two exporter as demand remains elusive.

Commodities trading giant Vitol last offered a September-loading cargo of Angolan Olombendo crude for dated Brent minus $2.50 and it was unclear if any buyers emerged.

Unipec last offered Sangos, Mostarda and Clov for dated Brent minus $1.35, minus $2.20 and minus 60 cents respectively, with traders saying no purchases resulted.

Meanwhile, Nigerian crude continued to face stiff competition for sales to Europe as well as to East Asia from U.S. light sweet crude grades.

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Oil Prices Inch Higher after Biden’s Call for OPEC’s Boost