Oil up, expectations of OPEC+ output restraint continue

Oil was up Thursday morning in Asia, recouping some of its overnight losses as expectations that the Organization of the Petroleum Exporting Countries and allies (<a href=’https://theenergyyear.com/companies-institutions/opec/’>OPEC+) will continue to restrain output.

Brent oil futures were up 0.59% to $63.11 by 12:53 AM ET (4:53 AM GMT). WTI futures gained 0.68% to $59.57, slipping just below the $60 mark.

The cartel’s member states will meet later in the day, where the global output for May will be on the top of the agenda.

“The most likely outcome of the… meeting is no significant changes in production,” Eurasia Group said in a note.

“The caution on display in the OPEC+ discussions signals that any decisions on tapering will likely be delayed to the May meeting,” the note added, in reference to the gradual supply of withheld production to the market.

The OPEC+ joint technical committee, which met on Wednesday, reportedly made no formal recommendation. OPEC+ is currently curbing output by just over 7 million barrels per day (bpd) to support prices and avoid a supply glut. Saudi Arabia, the world’s second-largest oil producer, is additionally cutting a further 1 million bpd.

Meanwhile, the number of global Covid-19 cases continues to rise, with several regions reporting outbreaks and imposing restrictive measures. France, for example, entered its third lockdown, with schools to close for three weeks.

In the US, Wednesday’s crude oil supply data from the US Energy Information Administration reported a draw of 876,00 barrels in the week ended Mar. 26. Forecasts prepared by Investing.com predicted a 107,000-barrel build, while a 1.912-million-barrel build was reported for the previous week.

Supply data from the American Petroleum Institute the day before reported a build of 3.91 million barrels.

First published in Investing.com