Oil prices rose on Wednesday after a sharp drop in U.S. crude inventories, with the market waiting for more direction from a meeting later in the day on the future level of production by OPEC and its allies, The Economic Times reported.
Brent crude futures were up 10 cents, or 0.2 per cent, at $43 a barrel as of 0049 GMT, and U.S. West Texas Intermediate (WTI) crude futures rose 14 cents, or 0.4 per cent, to $40.43 a barrel.
In a sign of improving demand despite the coronavirus pandemic, U.S. crude inventories fell by 8.3 million barrels in the week to July 10, beating analysts’ expectations for a decline of 2.1 million barrels, according to data from industry group the American Petroleum Institute.
Official data from the U.S. Department of Energy’s Energy Information Administration (EIA) is due on Wednesday.
On supply, the market will be closely watching the Joint Ministerial Monitoring Committee (JMMC) of the Organization of the Petroleum Exporting Countries (OPEC) later on Wednesday.
Key members of OPEC and allies including Russia, a group known as OPEC+, are set to decide whether to extend output cuts of 9.7 million barrels per day (bpd) that end in July or ease them to 7.7 million bpd.
“OPEC+ decision on production cut tapering will set the tone for the oil market,” ANZ Research said in a note.
In June, OPEC and its allies delivered compliance of 107 per cent with their agreed oil output cuts, an OPEC+ source said on Tuesday.