Oil prices rose on Wednesday, supported by an OECD forecast for global economic recovery and by OPEC+ oil output curbs, though gains were capped by rising U.S. inventories.
U.S. West Texas Intermediate crude rose $1.05, or 1.66%, to $64.84.
Brent crude rose $1.18, or 1.73%, to $68.34 a barrel.
The pandemic-hit global economy is set to rebound with 5.6% growth this year and expand 4% next year, the Organisation for Economic Cooperation and Development (OECD) said in its interim economic outlook. Its previous forecast had been for growth of 4.2% this year.
“When it comes to lifting market sentiment, there is very little that can rival an upgrade to the post-COVID economic recovery,” said Stephen Brennock of broker PVM.
Prices also gained support from the decision by the OPEC+ producer group 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,” Standard Chartered said in a note.
Saudi Foreign Minister Prince Faisal bin Farhan Al Saud on Wednesday that Saudi Arabia and Russia were keen for fair oil prices and will continue their cooperation in the framework of the OPEC+ group.
As part of a deal by OPEC+, Saudi Arabia has pledged to cut production voluntarily by 1 million barrels per day (bpd) in February and March, but oil exports from the kingdom – as monitored by two companies – suggest a smaller decline in February.
Oil 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 of Iranian supplies, analysts said.
U.S. crude inventories rose by 12.8 million barrels in the week to March 5, trading sources said, citing data from industry group the American Petroleum Institute. Analysts polled by Reuters had expected a build of about 800,000 barrels.
Official figures from the Energy Information Administration (EIA) are due later on Wednesday.
Higher prices are expected to bring more U.S. supplies back online. However, U.S. crude production is still expected to fall by 160,000 bpd in 2021 to 11.15 million bpd, the EIA said on Tuesday. Its previous monthly forecast was for a drop of 290,000 bpd.