Oil Prices Rally to 4-Month High

Thursday will see a new monthly oil report from OPEC get released, and the IEA is expected to publish a report this Friday.

Continued supply reductions would further support oil prices, which are up about 25 per cent this year at $68 a barrel. This week the EIA reported a fall of 3.9 MMbbls (million barrels) in USA crude oil inventories compared to a Reuters poll for a rise of 2.861 MMbbls for the week ended March 8.

Since the start of the year, oil has rallied around a quarter since the start of the year. "The OPEC-plus meeting could give us a little direction", he said.

The EIA said the pace of demand growth could be slower than what was thought just a month ago. Saudi Arabia, the world's top oil exporter, indicated on Monday that it would cut April exports. Opec+ changed course after prices slid from $86 in October, making them wary of a new glut.

Speaking of importers, the IEA noted the USA has started buying a lot more crude from Russian Federation to replace lost Venezuelan barrels. OPEC's report said oil inventories in developed economies were above the five-year average in January.

Prices of the WTI seems to have met resistance in the vicinity of the $59.00 mark per barrel today following four consecutive sessions with gains.

BNP Paribas strategist Harry Tchilinguirian told the Reuters Global Oil Forum: "Buyers with (Iran oil) waivers are likely going to hold back until there is more clarity in the U.S. administration's position".

Saudi Energy Minister Khalid al-Falih said on Sunday that the production-curbing agreement would likely last until at least June.

Iraq exported on average around 3.6 million bpd in January-February, and 3.7 million in December.

Oil prices were near flat Thursday morning following an extension of Wednesday's gains based on an EIA report with a downward change in USA production projections, analysts said.

American benchmark West Texas Intermediate was at $58.44 a barrel at the same time, posting almost a 0.2 percent increase, after ending the previous session at $58.34 per barrel. WTI hit a high of $58.48 a barrel on Wednesday, the highest since November 13.

"OPEC's compliance was a robust 94 percent, compared to 51 percent from non-OPEC", said the IEA, adding that major producer Russian Federation was continuing to adjust its production gradually.

Vanessa Coleman