Oil edges up as OPEC cuts, U.S. inventories brighten outlook
2023.04.04 22:29
© Reuters. FILE PHOTO: An aerial view shows an oil factory of Idemitsu Kosan Co. in Ichihara, east of Tokyo, Japan November 12, 2021, in this photo taken by Kyodo. Picture taken on November 12, 2021. Mandatory credit Kyodo/via REUTERS
By Laila Kearney
(Reuters) – Oil prices rose in early Asian trade on Wednesday on anticipated inventory declines and OPEC+’s latest output cut targets.
futures gained 38 cents to $85.32 a barrel at 0021 GMT. West Texas Intermediate U.S. crude was up 33 cents to $81.04 a barrel.
Helping boost oil prices was an industry report showing that U.S. crude stocks fell by about 4.3 million barrels in the week ended March 31, according to market sources citing American Petroleum Institute figures on Tuesday.
In Asia, Japan’s service sector grew in March at the fastest rate in more than nine years.
Gasoline inventories fell by about 4 million barrels, while distillate stocks fell by about 3.7 million barrels, according to the sources, who spoke on condition of anonymity because they were not authorised to speak to the media.
The official inventory report by the Energy Information Administration, the statistical arm of the U.S. Department of Energy, is due at 1430 GMT on Wednesday.
The latest targets set by the Organization of Petroleum Exporting Countries (OPEC) and allies including Russia, a group known as OPEC+, also helped oil prices. The OPEC+ plan would bring the total volume of cuts by the group to 3.66 million bpd, including a 2 million-barrel cut last October, equal to about 3.7% of global demand.
Keeping oil prices from moving higher were concerns about demand, with U.S. job openings in February falling to the lowest level in nearly two years and U.S. manufacturing activity in March slumping. Weak manufacturing activity in China last month also added to crude oil demand concerns.
