Oil prices rose again by more than 1% during trading on Thursday, with Brent crude rising above $92, in a volatile session, with the release of the monthly OPEC report.
Crude prices turned lower earlier in trading, with a noticeable rise in the US dollar during trading, after US data showed inflation accelerating to a 40-year high in January.
This comes as investors await the outcome of nuclear talks between the United States and Iran, which could quickly add crude supplies to global markets.
Oil Prices Today
The prices of West Texas Intermediate crude futures – for March delivery – rose by 1.3%, recording $ 90.86 a barrel, after falling under $ 90 during trading.
The prices of Brent crude futures – April 2022 delivery – also rose by 1.1%, recording $92.68 a barrel, after falling below $91 during the session.
Crude prices rose in early trading, after an unexpected drop in US crude inventories, which indicated an increase in demand for crude.
US Oil Stocks
A strong demand recovery from the coronavirus pandemic has increased demand for global oil supplies; Inventories in the world’s major fuel centers are hovering at multi-year lows.
The Energy Information Administration said that US oil stocks fell by 4.8 million barrels in the week ending February 4, to 410.4 million barrels, the lowest level for commercial stocks since October 2018.
Energy Information Administration data showed that the supply of US products peaked at 21.9 million barrels per day over the past 4 weeks due to strong economic activity nationwide.
“We’re seeing some consolidation after a fairly constructive EIA report,” said Warren Patterson, head of commodity research at ING.
OPEC’s oil production rose by 64,000 barrels per day over the past month, bringing the total to 27.981 million barrels per day, led by Nigeria, Saudi Arabia and the United Arab Emirates.
The organization maintained its forecast for the growth of global demand for oil by about 4.15 million barrels per day this year, so that the total is expected to reach 100.79 million barrels per day.
OPEC also fixed its estimates for the growth of oil supply from outside the organization at 3.02 million barrels per day during the current year.
However, investors are closely watching the outcome of the US-Iran nuclear talks that resumed this week, and the agreement could lift US sanctions on Iranian oil and ease tight global supplies.
The White House publicly lobbied Iran on Wednesday; to quickly revive the 2015 Iran nuclear deal, saying it would be impossible to return to the deal if no deal was reached within weeks.
“The fundamental uncertainty remains whether Iran is ready to sign on the dotted line,” said Eurasia analyst Henry Roma, adding that the consultancy was sticking to a 40% request to return to the agreement.
Warren Patterson added that restoring sanctions waivers to Iran to allow international nuclear cooperation projects that were announced last week, along with some positive comments from Russian diplomats, indicate that the two sides are close to an agreement.
He pointed out that any quick agreement will likely put more downward pressure on prices; Because it will help alleviate some concerns about a shortage of OPEC spare capacity, Reuters reported.
Separately, US President Joe Biden and Saudi King Salman discussed energy supplies and developments in the Middle East, including Iran and Yemen, during a phone call on Wednesday.
The Saudi Press Agency said that Saudi King Salman also spoke about maintaining balance and stability in the oil markets, and stressed the need to preserve the OPEC+ supply agreement.
In Europe, US Vice President Kamala Harris will meet allies and partners in Munich next week; In order to deter Russian aggression against Ukraine.