Oil prices edged higher in Asia as OPEC revised its loss forecast for next year.
U.S. Crude Oil WTI futures increased by 0.1% to $58.84. Also, International Brent Oil Futures surged 0.4%.
In a report released overnight, OPEC said they are expecting a small loss in the oil market in the next year. They suggested the market is tighter than recent thought.
The revised report by OPEC marks a further pull back from a prediction of an oversupply in 2020 as U.S. output growth starts to slow down.
After EIA’s report that crude inventories increased by 822,000 for the week of Dec. 6, oil prices were trading lower in the day. Also, the drawdown is 2.76 million barrels, according to analysts’ reports.
Gasoline inventories increased by 5.4 million barrels versus the expectations for an increase of around 2.5 million barrels. That was the highest weekly build in gasoline since January, according to EIA.
Meanwhile, distillate inventories surged by 4.1 million barrels, compared to report for a build of around 1.6 million barrels.
An analyst said refiners are turning out goods at a frantic pace that the market does not need, which is why there is a continuous build in gasoline and distillates.
Refinery runs are continuing at over 90% of standing capacity. The drawdown of almost 3 out of 5 million barrels at the Cushing Oklahoma delivery point for WTI shows the searing pace of refining.
Traders turn their focus on how the Trump administration would proceed on Sunday. It is the deadline for tariffs on another $156 billion worth of Chinese products.
Oil Prices Increased as OPEC Revises Loss Report
Oil prices traded higher with the market mood switching to relief as OPEC report a supply loss next year. It is from doom and gloom over data showing a surprise surge in U.S. crude inventories.
Brent futures increased 24 cents, or 0.4% to $63.96 a barrel after sliding 1% on Wednesday on the U.S. stocks build-up.
West Texas Intermediate crude dropped 10 cents or 0.2% at $58.85 a barrel. It also fell by 0.8% in the recent session.
OPEC said they expect a small loss in the oil market in the next year even before the latest deal with other producers to cut supply takes effect.
The revised report by OPEC is a further retreat from a vision of glut in 2020 as U.S. output growth starts to slow.
United States inventories are on the boost. Crude stockpiles increased last week unexpectedly, boosting more than 800,000 barrels.
Inventories of petroleum goods also gained with gasoline stocks increased by more than 5 million barrels. Besides, distillates gained a bit over 4 million barrels.
Shareholders are awaiting news on negotiations between Washington and Beijing to end a long-running trade war. It will get a deal before another round of U.S. sanctions kicks in.
The lingering feud between the world’s two biggest economies hit global growth in the process of denting demand for crude and oil products.
The U.S. President Trump is expected to discuss tariffs on Chinese products. They are set to be imposed on Dec. 15 with top trade advisers as markets prepare for fallout in China’s reaction.
The chief Asia market strategist at AxiTrader said U.S.-China trade remains the initial catalyst and the 500-pound gorilla in the room.