Oil Price Fundamental Daily Forecast – EIA Reports Small Drawdown Ahead of Thursday’s OPEC+ Decision

U.S. West Texas Intermediate and international-benchmark Brent crude oil futures are edging higher at the mid-session shortly after the release of the latest U.S. Energy Information Administration weekly inventories report.

The limited reaction to the report and the relatively low volume suggests investors have shifted their focus to Thursday’s policy meeting between OPEC and its allies. The group, known as OPEC+, is expected to vote on the level of production cuts for May.

At 15:16 GMT, May WTI crude oil futures are trading $61.03, up $0.48 or +0.79% and June Brent crude oil futures are at $64.81, up $0.24 or +0.37%.

US Energy Information Administration Weekly Inventories Report

The government released a mixed inventories report earlier Wednesday. U.S. crude stocks declined unexpectedly during the week-ending March 26, while gasolines stocks fell and distillates rose, the Energy Information Administration (EIA) reported.

Crude inventories fell by 876,000 barrels in the week to March 26. This was slightly below the consensus estimate of a 1.3 million barrel draw. Analysts consulted by Reuters expected a rise of 107,000.

Gasoline stocks declined by 1.7 million barrels. Traders were looking for a rise of 730,000 barrels. Distillate inventories rose by 2.5 million barrels versus an expected rise of 171,000 barrels, the EIA report showed.

Crude stocks at the Cushing, Oklahoma distribution center increased by 782,000, the EIA added. Refining increased by 552,000 barrels per day. The utilization rate increased by 2.3 percentage points. Net crude imports in the United States fell by 170,000 barrels per day.

American Petroleum Institute Weekly Inventories Report

The API reported a build in crude oil inventories of 3.910 million barrels for the week ending March 26. Analysts were looking for a small build of 107,000 barrels for the week.

The API also reported a draw in gasoline inventories of 6.012 million barrels for the week-ending March 26. Analysts had expected a 730,000-barrel build for the week.

Distillate stocks saw an increase in inventories this week of 2.595 million barrels for the week.

Finally, Cushing inventory figures rose by 904,000.

Short-Term Outlook

Volatility was highlighted again on Wednesday with the markets posting a two-sided trade. The markets seem to still be reeling from the prospect of oil shipment delays through the previously blocked Suez Canal and OPEC+’s JTC meeting on Tuesday, which saw its members agree to revise down its oil estimates for this year.