OPEC+ has lowered its oil demand growth forecast for this year by 300,000 barrels per day (bpd), a report from its experts panel meeting seen by Reuters showed. The Organization of the Petroleum Exporting Countries and allies, together called OPEC+, are set to meet on Thursday, to decide on output policy. “Given this pessimistic outlook, it seems likely that the production quotas will be left in place for another month,” said Commerzbank analyst Eugen Weinberg. OPEC+ are currently curbing output by just over 7 million bpd in a bid to support prices and reduce oversupply. Saudi Arabia has added to those cuts with an additional one million bpd. “The oil market is still playing a guessing game today as to what supply policy OPEC+ will set out at tomorrow’s meeting, but the $64 per barrel Brent price signals that traders expect a cautious approach from the alliance,” said Rystad Energy’s analyst Louise Dickson.
Kuwait’s Oil Minister Oil Mohammad Abdulatif al-Fares expressed “cautious optimism” on Wednesday that global oil demand will improve as COVID-19 vaccination programmes gather pace and industrial output recovers. OPEC oil output rose in March as higher supply from Iran countered reductions by other members under a pact with allies, a Reuters survey found, a headwind for its supply-limiting efforts if Tehran’s boost is sustained.
Meanwhile, data from the American Petroleum Institute showed a bigger than expected build in U.S. crude stocks. Traders will be eying data later on Wednesday from the U.S. Energy Information (EIA) for further guidance. Oil prices found some support as China’s manufacturing activity expanded at the quickest pace in three months in March as factories cranked up production after a brief lull during the Lunar New Year holidays.
