LONDON: Oil prices rose after a reported sharp drop in US crude stocks and OPEC member Iraq said the producer group would discuss deepening output cuts amid ongoing demand concerns.
Brent crude gained $0.65, or 1%, to $63.03 a barrel by 1253 GMT while US West Texas Intermediate rose $0.58, or 1%, to $57.98 a barrel.
Oil prices have risen more than 7% this month, supported by declines in global inventories and signs of an easing in trade tensions between the United States and China, the world’s two largest economies and energy consumers.
Prices rose this week after Prince Abdulaziz bin Salman, Saudi Arabia’s new Energy Minister, said oil policy would not change and said an OPEC deal with Russia and other producers to cut output by 1.2 million barrels per day (bpd) would be maintained.
Iraqi Oil Minister Thamer Ghadhban said the Organisation of the Petroleum Exporting Countries (OPEC) would discuss whether to deepen cuts, when ministers meet on Thursday. He said OPEC had discussed cuts of 1.6 million to 1.8 million bpd, when considering output curbs last year.
Russia’s Energy Minister Alexander Novak said the alliance of OPEC and other producers, known as OPEC+, would discuss global oil demand, but added that there were no fresh proposals to change production cut volumes.
OPEC cut its forecast on Wednesday for growth in world oil demand in 2020 by 60,000 bpd to 1.08 million bpd due to an economic slowdown. It indicated the market would be in surplus. The US Energy Information Administration (EIA) also slashed its demand forecasts this week.
Growing signs of slowdown were flagged by oil traders and executives attending industry gatherings in Singapore and Abu Dhabi this week.
OPEC has pointed to rising global production next year, particularly in US shale fields, while data from the American Petroleum Institute (API) showed US crude stocks fell last week by 7.2 million barrels, more than twice the amount analysts in a Reuters poll had forecast.
“The API report is quite constructive for the oil market as it points to a tightening domestic oil market in the face of flat production and stronger demand,” Dutch bank ING said. The EIA’s official numbers for US inventories were due to be released at 1430 GMT on Wednesday.
