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OPEC, Russia-led group agree to increase oil production
WTI prices extended earlier gains following the bullish EIA inventory report that overshadowed the boost in production announced by OPEC+.
The Energy Information Administration (EIA) is the statistical agency of the Department of Energy. It provides policy-independent data, forecasts, and analyses to promote sound policy making, efficient markets, and public understanding regarding energy, and its interaction with the economy and the environment.
Crude prices have climbed a whopping 6-handles on the day, surging to $117.27 from an overnight low of $111.20. This is the highest since March.
The market has been whipped recently, with prices climbing on news EU would sanction some Russian oil imports, only to tumble on reports OPEC+ was considering excluding Russia from production quotas which suggested increased output from Saudi and UAE to make up for the loss.
Then overnight there was talk that the cartel would boost production between 500 M and 700 M barrels, which saw prices dip to the lows, but only briefly.
Prices rallied and remained elevated into the $114 area, even after OPCE+ confirmed the production increase by some 50% or 648k bpd in July and August, as there were doubt the increased output can be effected.
There is also skepticism supply will be able to meet demand down the road. The market also was likely pricing in an inventory shortfall, which the EIA confirmed with crude stocks falling 5.1 M barrels, while distillates and gas stocks declining too.
WTI is up $1.43 to $116.67 per barrel. Brent is up $1.22 to $117.52 per barrel. Gasoline is up 0.126 to $4.199 per gallon. Note that dollar is weaker today which is also helping oil prices. Euro last traded at $1.08 after hitting a low of $1.06 on the day.
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