Oil has risen in the wake of the US stock draw ahead of the OPEC + decision

Author: Yuka Obayashi

TOKYO (Reuters) – Oil prices rose on Wednesday to a seven-year high last week, with data on the stock underscoring strong demand, but investors remained cautious ahead of the OPEC + meeting.

It rose 36 cents, or 0.4%, to $ 89.52 a barrel for 0123 GMT, after subtracting 10 cents on Tuesday.

US West Texas Intermediate crude rose 38 cents, or 0.4%, to $ 88.58 a barrel, up 5 cents from the previous day.

Global supply and geopolitical tensions in Eastern Europe and the Middle East have pushed oil prices up more than 15% this year. On Friday, crude benchmarks hit record highs since October 2014, with Brent hitting $ 91.70 and U.S. crude hitting $ 88.84.

“The drop in U.S. crude inventories helped support, even though the rise in gasoline stocks partially offset the fragile sentiment,” said Satoru Yoshida, a raw material analyst at Rakuten Securities.

“OPEC + is likely to keep its policy unchanged, which means that supply shortages and rising oil prices will continue,” he said.

U.S. crude oil stocks fell 1.6 million barrels in the week ended Jan. 28, analysts said they were up 1.5 million barrels, according to market sources at the American Petroleum Institute on Tuesday.

But gasoline inventories rose 5.8 million barrels, which analysts expected to build 1.6 million.

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The Organization of the Petroleum Exporting Countries and allies, commonly known as OPEC +, are likely to stick to moderate product growth on Wednesday, five sources in the producer group said, although they expect demand to rise to new heights this year. as oil prices sell close to seven-year highs.

But Goldman Sachs (NYSE 🙂 said the oil market rally was likely to drive a faster rise.

Sources said at an OPEC + technical panel meeting on Tuesday that an increase of more than 40,000 barrels was expected from March onwards.

Tensions between Russia and the West also pushed up crude prices. Russia, the world’s second-largest oil producer, and the West have been fighting over Ukraine, raising fears that Europe’s energy supply could be disrupted.

On Tuesday, Russian President Vladimir Putin accused Russia of creating a scenario to deliberately lure the West into war and ignoring Russia’s security concerns about Ukraine.