Offshore oil platforms are seen on April 20, 2020 in Huntington Beach, California. Oil prices were negotiated in negative territory for the first time as the spread of the coronavirus (COVID-19) affects demand.
Michael Heiman | fake pictures
Oil prices rose on Wednesday after a sharp drop in US crude inventories, with the market awaiting further instructions from a meeting later in the day on the future level of output from OPEC and its allies.
Brent crude oil futures rose 10 cents, or 0.2%, to $ 43 a barrel from 0049 GMT, and US West Texas Intermediate (WTI) crude oil futures rose 14 cents, or 0.4%, to $ 40.43 a barrel .
In a sign of improving demand despite the coronavirus pandemic, US crude inventories fell by 8.3 million barrels in the week to July 10, beating analyst expectations for a decline 2.1 million barrels, according to data from the American Petroleum Institute industrial group.
Official data from the US Department of Energy’s Energy Information Administration (EIA) is due on Wednesday.
As for supply, the market will closely monitor the Joint Ministerial Monitoring Committee (JMMC) of the Organization of Petroleum Exporting Countries (OPEC) later on Wednesday.
Key members of OPEC and its allies, including Russia, a group known as OPEC +, are determined to decide whether to extend the production cuts of 9.7 million barrels per day (bpd) ending in July or reduce them to 7.7 million bpd.
“OPEC + ‘s decision on reducing the production cut will set the tone for the oil market,” ANZ Research said in a note.
In June, OPEC and its allies achieved 107% compliance with their agreed cuts in oil production, an OPEC + source said Tuesday.
Meanwhile, OPEC said in its monthly report that global oil demand would increase by a record 7 million bpd in 2021 as the world economy recovers from the coronavirus pandemic, although it will remain below the levels of 2019.
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