Oil Price Fundamental Daily Forecast – Edge Higher Amid Support for Supply Cuts, Lower Weekly Supply Forecast

U.S. West Texas Intermediate and international-benchmark Brent crude oil futures are edging higher on Tuesday with the latter testing its highest level since late May. According to reports, prices are being underpinned after Russia’s energy minister said cooperation with OPEC to support the market would continue and as analysts forecast a second weekly decline in U.S. crude inventories.

At 12:34 GMT February WTI crude oil futures are trading $60.77, up $0.25 or +0.41% and March Brent crude oil is at $65.74, up $0.32 or +0.49%.

Russia Comments on OPEC+ Output Produces Two-Sided Reaction

Oil prices fell on Monday after Russia said an OPEC-led pact may consider easing output cuts next year but prices held near recent three-month highs on hopes for a trade deal between the United States and China.

Earlier in the month, OPEC and other top producing nations led by Russia agreed this month to extend and deepen output cuts in the first quarter of 2020, but on Monday, Russian Energy Minister Alexander Novak said that the group known as OPEC+ may consider easing the output restrictions at their meeting in March.

“We can consider any options, including gradual easing of quotas, including continuation of the deal,” Novak told Russia’s RBC TV in an interview recorded last week, adding that Russia’s oil output was set to hit a record high this year.

However, prices turned around late Monday and on Tuesday after Novak added, OPEC, Russia and other producers that have linked up to curtail production and support prices will continue their cooperation as long as it is “effective and brings results.”

Cooperation with OPEC would continue “until the market requires it,” Novak added.

Qatar Petroleum to Start Pricing its Crude Grades on Forward Basis in February

Qatar Petroleum will start pricing its crude oil grades of Qatar marine and Qatar land on a prospective prices basis in February 2020, the company said on Tuesday, confirming an earlier report by Reuters.

The new step will improve the overall competitiveness of Qatar Marine and Qatar Land, and allow existing and new customers to better compare the Qatari crude grades with other grades, QP said.

Crude Stocks Expected to Have Fallen

Crude oil stocks are expected to have fallen by about 1.8 million barrels last week, a second week of declines, according to a preliminary Reuters poll.

Still, gasoline stocks are expected to have risen for a seventh week in a row and distillate inventories are forecast to have gained for a fifth consecutive week.

Due to the Christmas holiday, the U.S. Energy Information Administration (EIA) will report its weekly inventories numbers on Friday at 16:00 GMT instead of its regularly scheduled Wednesday time period.