Oil edges higher after OPEC+ keeps to steady supply bump, U.S.
stockpiles draw
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[February 03, 2022] By
David Gaffen
NEW YORK (Reuters) - Oil prices edged up on
Wednesday after OPEC+ stuck to planned moderate output increases despite
pressure from top consumers to raise output more quickly.
Brent crude ended settling up 31 cents to $89.47 a barrel, while U.S.
West Texas Intermediate crude gained 6 cents to $88.26 a barrel.
Global benchmark Brent has remained within striking distance of $90 for
several days now, buoyed by ongoing concerns about tight supply across
major world producers and steadily increasing demand. On Friday, both
benchmarks hit their highest since October 2014, with Brent touching
$91.70 and U.S. crude hitting $88.84.
The market has been unable to push higher, leading analysts to believe
sellers have been jumping in to take profits at these levels despite
bullish fundamentals. In a Wednesday note, Bank of America analysts said
the market was vulnerable to short-term pullbacks after the year's gains
so far.
"There's a lot of resistance up near $90, so we saw some profit taking,"
said Phil Flynn, analyst at Price Futures Group in Chicago.
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U.S. crude stockpiles fell by 1 million barrels last week, the U.S.
Energy Information Administration said, against expectations for an
increase, while distillate inventories also dropped amid strong demand
both domestically and in export markets. [EIA/S]
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Oil and
gas tanks are seen at an oil warehouse
at a port in Zhuhai, China October 22, 2018. REUTERS/Aly Song/File
Photo
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The Organization of the Petroleum Exporting Countries and allies including
Russia - known as OPEC+ - stuck with previously agreed-upon plans to boost
output by 400,000 barrels per day. The group, however, is struggling to meet
existing targets, and wary of responding to calls on its strained capacity for
more crude from top consumers to cap surging prices.
The group has blamed rising prices on the failure of consuming nations to ensure
adequate investment in fossil fuels as they shift to greener energy.
Several OPEC+ sources also said prices were pushed up by Russia-U.S. tensions
that have fanned fears that energy supplies to Europe could be disrupted.
Washington has accused Moscow of planning to invade Ukraine, which Russia, the
world's second-largest oil producer, denies.
The United States said on Wednesday it will send nearly 3,000 troops to Poland
and Romania in the coming days to reinforce Eastern European NATO allies as the
alliance continues to engage in diplomatic efforts with Russian President
Vladimir Putin to defuse the crisis.
A major winter storm is expected to wallop much of the central United States and
stretch to parts of the Northeast this week, bringing heavy snow, freezing rain
and ice, the National Weather Service said. The storm comes days after a deadly
winter blast and could boost prices of oil, especially as some regions
substitute out natural gas where supply may be scarce.
(Reporting by David Gaffen; Additional reporting by Julia Payne and Noah
Browning; Editing by Marguerita Choy and Will Dunham)
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