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Oil rises after U.S. crude stocks drop, focus on OPEC+ meeting

Published 07/15/2020, 08:52 AM
Updated 07/15/2020, 09:00 AM
© Reuters.
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SEOUL, July 15 (Reuters) - Oil prices rose on Wednesday
after a sharp drop in U.S. crude inventories, with the market
waiting for more direction from a meeting later in the day on
the future level of production by OPEC and its allies.
Brent crude LCOc1 futures were up 10 cents, or 0.2%, at
$43 a barrel as of 0049 GMT, and U.S. West Texas Intermediate
(WTI) crude CLc1 futures rose 14 cents, or 0.4%, to $40.43 a
barrel.
In a sign of improving demand despite the coronavirus
pandemic, U.S. crude inventories fell by 8.3 million barrels in
the week to July 10, beating analysts' expectations for a
decline of 2.1 million barrels, according to data from industry
group the American Petroleum Institute. API/S
Official data from the U.S. Department of Energy's Energy
Information Administration (EIA) is due on Wednesday.
On supply, the market will be closely watching the Joint
Ministerial Monitoring Committee (JMMC) of the Organization of
the Petroleum Exporting Countries (OPEC) later on Wednesday.
Key members of OPEC and allies including Russia, a group
known as OPEC+, are set to decide whether to extend output cuts
of 9.7 million barrels per day (bpd) that end in July or ease
them to 7.7 million bpd.
"OPEC+ decision on production cut tapering will set the tone
for the oil market," ANZ Research said in a note.
In June, OPEC and its allies delivered compliance of 107%
with their agreed oil output cuts, an OPEC+ source said on
Tuesday. Meanwhile, OPEC said in its monthly report that global oil
demand would soar by a record 7 million bpd in 2021 as the
global economy recovers from the coronavirus pandemic although
it would stay below 2019 levels.

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