Brent pares losses on expected draw in US weekly crude inventory
Front-month ICE Brent has gained by $1.10/bbl on the day, to $89.25/bbl at 09.00 GMT.
PHOTO: Getty Images
Upward pressure:
10 analysts and traders surveyed by The Wall Street Journal estimate that US commercial crude stockpiles were drawn by 800,000 to 2 million bbls in the week ending 18 November.
Going by an American Petroleum Institute (API) estimate, US commercial crude stocks declined by 4.8 million bbls. Official Energy Information Administration figures are due to come out at 15.30 GMT today.
Brent has also been supported by OPEC producers Saudi Arabia, UAE and Kuwait denying reports of upcoming production hikes. Saudi Arabia has also indicated it could reduce production further if necessary.
Downward pressure:
In an interview with CNBC, Amos Hochstein, special presidential coordinator to US President Joe Biden, has said the US administration will focus on bringing oil prices further down. “The President is really happy with the trajectory that the prices are coming down, but oil prices are still higher than they should be.”
Hochstein has also stated that the US must be "opportunistic" when refuelling its emergency reserves, which are currently at a 38-year low. The US will purchase 180-200 million bbls of oil at a price around $70/bbl or lower to refill its strategic petroleum reserves, he says.
The Organisation for Economic Co-operation and Development (OECD) has predicted a sobering 3.1% growth rate for the world economy this year - down from 5.9% last year. It forecasts an even more tepid 2.2% growth rate next year due to "high interest rates, punishing inflation, and Russia's war against Ukraine."
“It is true we are not predicting a global recession. But this is a very, very challenging outlook, and I don’t think that anyone will take great comfort from the projection of 2.2% global growth,” says OECD secretary-general Mathias Cormann.
By Konica Bhatt
Please get in touch with comments or additional info to news@engine.online
