Crude edges up ahead of OPEC+ meet, shrugs off US oil stockbuild

Oil prices edged higher in volatile trading on Wednesday as investors focused their attention on an upcoming OPEC+ output policy meeting and looked past a jump in U.S. crude, gasoline and distillate stockpiles.

Brent crude futures were up 43 cents, or 0.5%, to $82.11 a barrel by 11:32 a.m. ET [1632 GMT]. U.S. West Texas Intermediate (WTI) crude futures gained 49 cents, or 0.6%, at $76.90 a barrel.

Both benchmarks gained more than a dollar earlier in the session, briefly turned negative before the bearish weekly U.S. inventory report was released, and then rebounded after.

“Prices are going to remain volatile until we get greater clarity out of OPEC,” Kpler analyst Matt Smith said.

Oil benchmarks rose about 2% on Tuesday as the market anticipated that OPEC+, made up of the Organization of the Petroleum Exporting Countries and allies such as Russia, would extend or deepen supply cuts.

OPEC+ on Wednesday continued talks, which sources had described as difficult. A meeting to decide on next year’s output policy on Thursday was, however, expected to go ahead on schedule, sources said.
“We expect Saudi Arabia to extend their 1 million barrel per day production cut with little other positive news from the meeting,” Smith said.The Energy Information Administration reported a surprise build in U.S. crude oil and distillate fuel stocks last week, indicating weak demand. Gasoline stocks also rose by more than expected, the data showed.

However, the impact of those builds was neutralised by large draws in other refined products, like residual fuel oil, UBS analyst Giovanni Staunovo said.

A severe storm in the Black Sea region has disrupted up to 2 million bpd of oil exports from Kazakhstan and Russia, according to state officials and port agent data, raising the prospect of short-term supply tightness.

Kazakhstan’s largest oilfields are cutting combined daily oil output by 56% from Nov. 27, the Kazakh energy ministry said.