According to Tuesday’s API report, US crude inventories fell by 8.3 million barrels in the week to July 10, beating analysts’ expectations for a decline of 2.1 million barrels.
Official data from the Energy Information Administration are due later on today. Furthermore, an OPEC report published on July 14 raised its forecast for 2020 oil demand by 130, 000 b/d to 90.7 million b/d from its June forecast due to slightly better-than-expected oil demand from the OECD in the second quarter, and said demand in 2021 was expected to rise further to 97.7 million b/d.
OPEC+ June compliance to cuts reached 112%, showing unwavering unity within the group. All eyes are now pointed to the Joint Ministerial Monitoring Committee meeting set for later today, where will be decided whether to extend the current 9.7 million b/d production cuts or ease to earlier agreed 7.7 million b/d cuts in August.
However, despite expectations that the cartel is set to ease its current output cuts beginning next month, prices are holding steady on news that there will be an additional 842,000 b/d of supply cuts in August and September from the errant members of Iraq, Nigeria and Kazakhstan, thus effectively halving the additional OPEC+ supply being restored.
Meanwhile, low oil prices attracted opportunistic buying in China, recording all-time high crude oil imports of 13 million b/d in June, 14.6% higher than the previous record in May. According to ANZ analysts, the situation is due to persist thanks to higher oil import quotas for independent refiners and plans for collective purchases of oil by refining giants.