Talk of economic recovery and rising stock balance oil prices

London — Oil prices were steady on Wednesday, supported by an Organisation for Economic Co-operation and Development (OECD) forecast for the global economic recovery and by Opec+ output curbs, but held in check by rising US inventories.

Brent crude fell two US cents, or less than 0.1%, to $67.50 a barrel by 9.43am GMT.

US West Texas Intermediate crude rose 11c, or 0.2%, at $64.12 a barrel.

The world economy was set to rebound in 2021 with 5.6% growth and expand 4.0% in 2022, the OECD said in its interim economic outlook. Its previous forecast had been for growth of 4.2% in 2020.

“When it comes to lifting market sentiment, there is very little that can rival an upgrade to the post-Covid-19 economic recovery,” said Stephen Brennock of broker PVM.

Prices also gained support from the Opec+ decision to largely maintain production cuts in April.

“In our view, the March 4 Opec+ meeting has not just left the door to higher prices open, it has taken that door off its hinges and chopped it up for firewood,” said Standard Chartered in a note.

However, prices remained under pressure from a combination of factors including top importers China and India drawing crude from storage at current high prices and expectations of a return in Iranian supplies, analysts said.

In the US, crude inventories rose by 12.8-million barrels in the week to March 5, according to trading sources, citing data from industry group the American Petroleum Institute. Analysts had expected a build of about 800,000 barrels in a Reuters’ poll.

Official figures from the Energy Information Administration (EIA) are expected Wednesday at 10.30am ET.

Higher prices are expected to bring more US crude supplies back online.

US crude production is still expected to fall by 160,000 barrels per day (bpd) in 2021 to 11.15-million bpd, the EIA said on Tuesday, but that’s a smaller decline than its previous monthly forecast for a 290,000-bpd drop. 

Reuters