International crude oil prices rebounded on Wednesday, October 30, rising more than two per cent after data showed US crude and gasoline inventories fell unexpectedly last week and on reports that the Organisation of Petroleum Exporting Countries (OPEC) will likely delay its planned oil output increase.
After falling more than six per cent earlier in the week on the reduced risk of a wider Middle East war, Brent crude futures gained $1.81, or 2.5 per cent, to $72.93 a barrel. US West Texas Intermediate crude rose $1.85, or 2.8 per cent, to $69.06. Back home, crude oil futures rose 1.73 per cent higher at ₹5,766 per barrel on the multi-commodity exchange (MCX).
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Brent rises 3%: What’s driving crude oil prices?
-US gasoline stockpiles declined unexpectedly last week to a two-year low on strengthened demand, the Energy Information Administration (EIA) said. At the same time, crude inventories also posted a surprise drawdown as imports slipped.
-US crude oil imports from Saudi Arabia fell to their lowest point last week since January 2021, at just 13,000 bpd, down from 150,000 bpd the previous week. Crude imports from Canada, Iraq, Colombia, Brazil all slipped on the week, the EIA said.
-Commodity analysts said the most supportive element was the gasoline inventory draw amid higher implied demand week-on-week; lower imports helped crude inventories eke out a minor draw, which drove oil prices.
-News agency Reuters reported that OPEC+, which includes OPEC and allies such as Russia, could delay a planned oil production increase by a month or more in December because of concerns over soft oil demand and rising supply.
-OPEC+ has always advised that the unwinding of voluntary supply cuts would be subject to market conditions. The group is scheduled to raise output by 180,000 barrels per day (bpd) in December. OPEC+ has cut output by 5.86 million bpd, equivalent to about 5.7 per cent of global oil demand.
-A decision to postpone the increase could come as early as next week. Analysts said OPEC+ may be reconsidering the timing of a return of their barrels is not surprising given the weak macroeconomic realities, particularly in China, which have led to downward revisions in global demand growth estimates. OPEC+ is scheduled to meet on December 1 to decide its next policy steps.
-Commodity and financial markets are also gearing up for two crucial events next week — the US election and a meeting of China’s top legislative body, with investors watching for any additional stimulus efforts to revive the economy. The Asian nation is the world’s biggest crude importer.