Oil up over mounting supply concerns, rebounding demand signs

By Sibel Morrow

ANKARA (AA) - Oil prices increased on Thursday on the more-than-expected drop in US crude oil inventories and as investors closely monitor reports on whether the de facto leader of the OPEC+ group, Saudi Arabia, will decrease output.

International benchmark Brent crude traded at $100.31 per barrel at 10.08 a.m. local time (0708 GMT) for a 0.09% increase from the closing price of $100.22 a barrel in the previous trading session.

American benchmark West Texas Intermediate (WTI) was at $93.95 per barrel at the same time for a 0.22% gain after the previous session closed at $93.74 a barrel.

Oil prices stabilized this week, and markets are focused on reports of a possible oil output cut by Saudi Arabia.

The OPEC+ group has been gradually increasing its production since 2020 to phase out a massive output cut from weak demand caused by the COVID-19 pandemic.

The group will introduce a new production scheme, with a possible reduction in output as the current production cut pact will expire at the end of September.

On Monday, Abdulaziz bin Salman, the energy minister of Saudi Arabia, warned of a potential supply cut to stabilize prices since the volatile paper oil market needs clarity to break the vicious cycle which caused significant fluctuations.

Prices saw further support over signs of rebounding oil demand in the world’s largest oil consumer.

According to data released by the Energy Information Administration (EIA) on Wednesday, US commercial crude oil inventories decreased by around 3.3 million barrels against the market expectation of a fall of 450,000 barrels.

Gasoline inventories also decreased by 100,000 barrels to 215.6 million barrels over the same period.

Supply-side concerns increased after bp announced the shut-down of some of its units due to an electrical fire on Wednesday, impacting its 430,000 barrel-per-day Whiting refinery in Indiana.