Oil prices steady on US crude inventories rise lesser than expected ahead of OPEC meeting; Brent at $86/bbl

Oil prices were broadly stable on Wednesday, March 27, after US crude stockpile rose lesser than expected and also dragged by indications that the Organization of Petroleum Exporting Countries (OPEC) is unlikely to change its output policy at its technical meeting next week. Crude prices have retreated since hitting last week to their highest levels since October and remain about three per cent above the average closing price in the first week of March.

Brent crude futures for May were down 23 cents, or 0.3 per cent, to $86.02 per barrel while the more actively traded June contract was down 21 cents, or 0.3 per cent, at $85.42. The May contract expires on Thursday. US West Texas Intermediate (WTI) crude futures for May delivery fell 13 cents, or 0.2 per cent, to $81.49. Both benchmarks had fallen by more than $1 in earlier trading.

What’s dragging crude oil prices?

-The US Energy Information Administration (EIA) released data on Wednesday showing crude stocks were up 3.2 million barrels in the week ending March 22, compared to an expected decline of 1.3 million barrels

-OPEC and allies led by Russia (OPEC+), are unlikely to make any oil output policy changes until a full ministerial gathering in June, sources told news agency Reuters, ahead of next week’s meeting to review the market and members’ implementation of output cuts. OPEC this month agreed to extend output cuts of about 2.2 million barrels per day (bpd) to the end of June.