Oil prices strengthened yesterday with ICE Brent seeing its biggest gain since the end of February, settling 2% up on the day, taking it back above US$70/bbl. A lower-than-expected increase in US crude oil inventories supported the market, while better-than-expected US consumer price inflation data also helped sentiment, ING's commodity experts Ewa Manthey and Warren Patterson note.
OPEC remains fairly bullish on demand
"Energy Information Administration (EIA) data shows that US commercial crude oil inventories increased by 1.45m barrels over the last week. That’s less than the roughly 2m barrel build the market was expecting – and below the 4.2m barrel increase the American Petroleum Institute (API) reported the previous day. Refiners increased operating rates over the week, with crude oil inputs increasing by 321k b/d. Yet despite stronger refinery activity, refined product stocks declined."
"OPEC’s latest monthly oil market report, released yesterday, left both demand and supply estimates unchanged for 2025 and 2026. OPEC continues to forecast that 2025 oil demand will grow by 1.45m b/d year on year, while demand grows at 1.43m b/d next year. OPEC remains fairly bullish on demand, with their numbers above both the EIA and the International Energy Agency (IEA)."
"Meanwhile, OPEC production grew by 154k b/d MoM to 26.86m b/d in February. Nigeria and Iran were the key drivers behind this supply growth. Looking at broader OPEC+, supply grew by 363k b/d. Kazakh output surged by 198k b/d to 1.77m b/d, well above its production target of 1.47m b/d. Kazakhstan has said it will cut output in the future to compensate for this overproduction."
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