Oil strengthens OPEC + prospects of sustaining supply cuts, fall in U.S. investments

PHOTO FILE: The sun sets behind the chimneys of Total Grandpuits’ oil refinery, southeast of Paris, France, March 1, 2021. REUTERS / Christian Hartmann

SINGAPORE (Reuters) – Oil prices rose for a second straight session on Thursday, as OPEC + representatives could decide not to increase output at a key meeting later in the day in support of lending, together to fall in U.S. fuel investments.

Brent crude futures added 61 cents, or 1%, to $ 64.68 a barrel, as of 0428 GMT, after climbing more than 2% on Wednesday. U.S. West Texas Intermediate (WTI) crude futures gained 28 cents, or 0.5% to $ 61.56 a barrel.

The Organization of the Petroleum Exporting Countries (OPEC) and allies, known as OPEC +, are considering rolling production cuts into April instead of picking up production, as there is still a recovery in oil demand vulnerable to coronavirus crisis, three OPEC + sources told Reuters.

The market had expected OPEC + to reduce production cuts by around 500,000 barrels per day (bpd) from April.

“OPEC + is currently meeting to discuss the current procurement agreement. This has affected the spread of supply cuts, which has also been a stimulus to the market, ”ANZ said in a report

U.S. crude oil stocks rose to a record of more than 21 million barrels last week as refinement fell to a low level as a result of a Texas freeze that cut power for millions.

With refineries unable to process crude, gasoline and distillate deposits also falling sharply, especially in the Gulf Coast area where records declined, the U.S. Energy Information Administration said Wednesday.

“Declining prices have added Russia and Saudi Arabia to add more crude oil production,” said Stephen Innes, Axi’s global market strategist.

“Perhaps more interesting is the lack of a U.S. shale (production) response to higher crude oil prices, which is favorable for higher prices.”

Reciting with Naveen Thukral; Edited by Kenneth Maxwell and Christopher Cushing