Following resistance by the Organization of the Petroleum Exporting Countries (OPEC) to stick to its supply cuts despite pressure from U.S. President Donald Trump, Oil prices rose on Wednesday after a report of declining U.S. crude inventories.
For instance, U.S. West Texas Intermediate (WTI) crude oil futures stood at 55.99 dollars per barrel, up 49 cents, or 0.9 per cent, from their last settlement.
But international Brent crude futures were at 65.65 dollars per barrel, up 44 cents, or 0.7 per cent from their last close.
U.S. crude oil inventories fell by 4.2 million barrels in the week to Feb. 22, to 444.3 million barrels, the American Petroleum Institute (API) estimated in a weekly report on Tuesday.
Oil markets have generally received support this year from supply curbs by the OPEC, which together with some non-affiliated producers like Russia, known as OPEC+, agreed late last year to cut output by 1.2 million barrels per day (bpd) to prop up prices.
And the group has indicated it will continue to withhold supply despite pressure from Trump this week to stop artificially tightening markets.
“Crude oil futures bounced as OPEC members remained firm on planned production cuts despite heightened political pressure from U.S. President Trump early this week,” said Benjamin Lu of Singapore-based brokerage Phillip Futures.
Despite the OPEC-led curbs, oil remains in ample supply as U.S. crude production has risen by more than 2 million bpd over the past year, to a record 12 million bpd, and because demand growth is low due to a global economic slowdown and improving energy efficiency across industries.
“The OPEC+ production cuts have … so far failed to create the tightness needed to support a continued rally,” said Ole Hansen, head of the commodity strategy at Denmark’s Saxo Bank.