Investing.com — Oil prices rose Thursday, taking support from a report OPEC+ has decided to delay the restart of its oil production increases by three months.
At 09:10 ET (14:10 GMT), Brent oil futures rose 0.6% to $72.73 a barrel, while West Texas Intermediate crude futures rose 0.7% to $69.01 a barrel.Ā
OPEC+ set to delay production increasesĀ
The Organization of Petroleum Exporting Countries and allies (OPEC+) has decided to delay the restart of its oil production increases by three months, Bloomberg reported Thursday, representing the third postponement as crude prices remain under pressure.
The additional production of 180,000 barrels per day was expected to start in January, but will instead start in April, the report said, and be implemented at a slower pace than previously outlined.
The OPEC+ had slashed production by over 2 million barrels in the past two years, and is expected to keep supply limited amid concerns over slowing oil demand, especially in top importer China.
The OPEC+ has consistently cut its forecasts for global demand growth in 2024 and 2025, citing uncertainty over a sluggish economic recovery in China.Ā
US oil inventories fall, but products riseĀ
Government data released on Wednesday showed US oil inventories shrank by a bigger-than-expected 5.07 million barrels in the final week of November.
But gasoline and distillate stockpiles rose, indicating that overall fuel demand was still cooling in the worldās biggest fuel consumer.
While demand for heating fuels is expected to increase during the winter season, a downturn in travel activity is expected to bring down overall oil demand.
Middle East region in focusĀ
Oil markets registered some gains this week as the Israel-Hezbollah ceasefire teetered on the brink of collapse, with reports of violations from both sides. Israel also threatened to escalate its offensive against Hezbollah and Lebanon if the truce fell through.
Meanwhile, Donald Trump’s Middle East envoy has travelled to Qatar and Israel to kick-start the US President-elect’s diplomatic push to help reach a Gaza ceasefire and hostage release deal before he takes office on Jan. 20, according to a report by Reuters.
Wells Fargo (NYSE:WFC) sees improving crude fundamentalsĀ
Wells Fargo analysts predict a shift in global oil market dynamics by mid-2025, forecasting improved fundamentals and stronger prices following a period of oversupply.
They estimate a surplus of 1 million barrels per day in the first half of 2025, despite OPEC+ production cuts.
“Downside price risks exceed upside ones until mid-2025,” the analysts noted, but they expect better conditions in the second half of the year.
The bank maintains a long-term price forecasts of $80 forĀ BrentĀ and $75 for WTI, supported by decelerating US shale production and Saudi Arabia’s preference for prices above $70 per barrel.
(Ambar Warrick contributed to this article.)
Ā
Ā
This post is originally published on INVESTING.
