Oil prices were broadly steady on Wednesday, heading for monthly and quarterly gains, after some data suggested U.S. crude stockpiles were shrinking while an OPEC report warned of a possibly significant glut building by the end of next year.
U.S. West Texas Intermediate (WTI) crude futures was slighty down 2 cents, or 0.02% at $73.43.
Both contracts are just below highs last reached in 2018, and are set to record their seventh monthly gain in the past eight months.
While the highly contagious Delta coronavirus variant is taking hold in many countries, prompting new lockdowns or restrictions on movement from Australia to Portugal, hopes of a broader recovery in demand for fuel remain intact.
“Futures have been trading on a one-way ripper to the upside ever since the November 2 headline declaring a COVID-19 vaccine had been developed,” said Bob Yawger, director of energy futures, at Mizuho Securities.
Crude stocks in the United States were down by 8.2 million barrels, American Petroleum Institute data showed, according to two sources who spoke on condition of anonymity. Government data is due later on Wednesday.
Hopes for a broad recovery received a boost from Mohammad Barkindo, Secretary General of the Organization of the Petroleum Exporting Countries (OPEC), who said on Tuesday that demand is expected to rise by 6 million barrels per day (bpd) in 2021, with 5 million bpd of that coming in the second half of the year.
Goldman Sachs forecasts that demand will rise by a further 2.2 million bpd by the end of 2021, leaving a 5 million bpd supply shortfall.
However, an internal OPEC report seen by Reuters highlights that the oil market could return to a glut after the group is expected to unravel oil production cuts of under 6 million barrels per day by April 2022.
OPEC ministers and their allies are meeting to decide future policy on Thursday.