Citi Bank, which raised its Brent oil forecast for the fourth quarter to $85, said inventories may dwindle to their lowest level on record in terms of days-of-cover by year-end
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If you can’t hit the target, bring it closer. That seems to be the policy adopted by the OPEC+ alliance of oil producers as they make the world’s biggest-ever output cuts in an attempt to shore up oil prices.
After a meeting in January, the group’s co-leader, Saudi Arabia’s oil minister, Prince Abdulaziz Bin Salman, announced that the producers were setting themselves a new target for their output cuts restoring oil stockpiles in the developed countries of the Organisation for Economic Cooperation and Development to a new five-year average level.
They’re focusing on the OECD because its members report oil stockpiles in a (relatively) timely fashion preliminary levels for the end of December were published by the International Energy Agency last week, although they will be revised for many months to come. Whereas other countries, like China, don’t publish oil stockpile levels at all.
(Bloomberg) Oil futures rose for an eighth straight day in New York as a decline in U.S. crude inventories further highlighted depleting global supplies.The rally of about 0.6% extended the longest streak of daily gains since February 2019. A U.S. government report showed domestic oil stockpiles fell by 6.6 million barrels to the lowest since March, though the data also pointed to gasoline supplies rising to the highest since June.Underpinning crude’s rally, the spread between Brent’s nearest contracts has surged this week in another sign of tightening supplies amid OPEC+ production curbs. Citigroup expects Brent crude to reach $70 a barrel by the end of the year, with the producer group’s output agreement helping erode inventories and demand looking stronger than expected.“It was good to see the crude draw wasn’t just from one area, but constructive that it was throughout the whole U.S.,” said Brian Kessens, a portfolio manager at Tortoise,
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U.S. crude oil stocks plunged unexpectedly last week, tumbling by more than 6 million barrels, as refiners ramped up production rates to pre-pandemic levels in March amid rising fuel demand, the Energy Information Administration said on Wednesday.
Crude inventories fell by 6.6 million barrels in the week to Feb. 5 to 469 million barrels, compared with expectations in a Reuters poll for a 985,000-barrel rise.
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