Fundamental analysis
01 April, 2021
Crude prices rose on Thursday, recouping some of the previous session’s losses on expectations that a meeting of OPEC and its allies later on Thursday would yield output constraint in the face of resurgent COVID-19 infections in some regions. Ministers from the Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia and Kazakhstan, a group called OPEC+, meet later on Thursday to consider options that include an output roll-over and a gradual output increase. A lowering of the OPEC+ oil demand growth forecast for this year by 300,000 barrels per day (bpd) also weighed on prices and made it more likely the meeting would result in continued restraint. On Wednesday, the Joint Technical Committee, which advises the group of oil-producing nations that includes Saudi Arabia and Russia, made no formal recommendation, three OPEC+ sources said. OPEC+ is currently curbing output by just over 7 million bpd to support prices and reduce oversupply. Saudi Arabia has added to those cuts with a further 1 million bpd. The EIA Weekly Inventory report showed Crude Oil inventories declining 876,000 barrels last week. The consensus forecast was for an increase of 107,000 barrels.
