Brent crude futures were 10 cents higher to $78.69 a barrel, while U.S. West Texas Intermediate crude jumped 13 cents to $73.44
Oil prices rose for a third day on Wednesday after industry data showing U.S. crude inventories grew less than expected and a cut in the forecast for output growth in the U.S., the world’s largest producer, eased concerns about potential oversupply.
Brent crude futures were 10 cents higher to $78.69 a barrel as of 0728 GMT, while U.S. West Texas Intermediate crude jumped 13 cents to $73.44.
American Petroleum Institute (API) figures showed U.S. crude stocks increased 670,000 barrels in the week to February 2.
U.S. government weekly data on oil inventories will be released later on Wednesday.
For 2024, the U.S. Energy Information Administration on Tuesday cut its outlook for domestic oil output growth by 120,000 bpd to 170,000 bpd, sharply lower than last year’s output increase of 1.02 million bpd.
The Energy Information Administration also forecast U.S. production would not exceed the December 2023 record of over 13.3 million bpd until February 2025.
The outlook strengthened the case that the oil market will be balanced in 2024, analysts at Haitong Futures said in a note, adding that they expect oil prices to stay in a $10 range around current levels.
Traders have been following the situation in the Middle East, especially attacks on shipping in the Red Sea that have disrupted traffic through the Suez Canal, the fastest sea route between Asia and Europe and one that carries around 12% of global trade.
Given the heightened geopolitical risk, the rangebound trading and lack of a risk premium may surprise some, ING analysts Warren Patterson and Ewa Manthey stated in a note.
It is important to remember that while we are seeing disruptions to trade flows as a result of Red Sea developments, oil production remains unchanged as a result, the analysts said.
