U.S. West Texas Intermediate and international-benchmark Brent crude oil futures are in a position to close higher for the week after starting the week with a slightly bearish tone. Helping to underpin prices this week was a surprise decline in U.S. inventories and optimism about more efforts to support prices by OPEC and its allies. Gains were likely capped by gloomy growth forecasts over the outlook for global demand.
At the end of the week, traders continued to react to Wednesday’s government weekly inventory report that showed an unexpected drop in supply.
According to the U.S. Energy Information Administration (EIA), crude inventories fell 1.7 million barrels in the week ended October 18, compared with analysts’ expectations for a 2.2 million barrel build. This was a stark contrast with earlier inventory data released by industry group the American Petroleum Institute (API), which showed a build of 4.5 million barrels in U.S. crude stocks.
The EIA said the drawdown in weekly stocks came as refiners hiked crude runs and oil imports fell, which prodded a jump in both benchmark crude grades on Wednesday.
Traders are betting on OPEC and its allies extending supply curbs to offset the weaker demand outlook in 2020.
Saudi Arabia, OPEC’s de facto leader, wants to focus first on boosting adherence to the group’s production-reduction pact with Russia and other non-members, an alliance known as OPEC+, before…