Crude oil futures were higher during mid-morning trade in Asia Wednesday amid a draw reported in US crude inventories, while development around production cuts by OPEC and its allies kept prices supported.
At 10:53 am Singapore time (0253 GMT), February ICE Brent crude futures were up 63 cents/b (1.05%) from Tuesday’s settle at $60.97/b, while the NYMEX January light sweet crude contract was 52 cents/b (1.0%) higher at $52.34/b.
According to analyst reports quoting the American Petroleum Institute data out on Tuesday, US crude inventories for the week ended December 7 were down 10.18 million barrels.
Analysts surveyed Monday by S&P Global Platts were looking for US crude stocks to have declined by 2.6 million barrels for the same period.
Market participants would be looking out for the report from the US Energy Information Administration later Wednesday to confirm the draws reported in US crude inventories.
Meanwhile, Russia Energy Minister Alexander Novak on Tuesday said that Russia expects to hit its target of trimming oil production by 228,000 b/d, or 2%, under the OPEC-led production cut agreement within four months.
“We believe that the cuts, if strictly implemented, will rebalance the oil market next year, ” Commerzbank analysts said in a note.
“The only exception is the low-demand first quarter, especially as Russia will only be able to implement its production cuts gradually, as was the case two years ago,” they added.
“We will try. Each company is in a different situation. Within four months is, of course, realistic,” Novak was quoted as saying by Russia’s Prime news agency.
Russia committed to reducing output step by step, as freezing winter temperatures in the country make a rapid reduction impractical. The group is to meet in April to review the progress of the deal.
“Crude oil prices rose amid optimism that OPEC production curbs will stabilize the market,” ANZ analysts said in a note Wednesday.
Elsewhere, EIA on Tuesday released its Short-Term Energy Outlook, in which it reduced its forecast for WTI and Brent crude spot prices in 2019, largely due to record global output, particularly in the US, and lower-than-expected demand.
EIA forecasts WTI to average $54.19/b in 2019, down $10.66/b from the agency’s forecast last month, and Brent to average $61/b in 2019, down $10.92/b from last month’s forecast.