The strong performance on Thursday has put crude oil in a position to finish the week at a three-week high. The week began with the market being underpinned by reports that OPEC and non-OPEC members had gathered in Kuwait last weekend to discuss the possibility of extending the program to reduce output.
Later in the week, the rally began to pick up more support after Libya reported supply disruptions. The short-covering rally continued on Wednesday after the U.S. Energy Information Administration (EIA) reported an inventory build that was smaller than expected.
Oil prices surged for a third day on Thursday after reports surfaced that Kuwait gave its backing for an extension of OPEC production cuts. Speculators are also betting that Saudi Arabia will roll over its production cuts for another six months starting in July.
Later in the week, there were also reports that Russia may be gradually reducing production, bringing it closer to the 300,000 barrel per day output cuts that it had promised.
Fresh data from the U.S. Energy Information Administration (EIA) showed crude oil inventories rose 867,000 barrels in the week-ending March 24. This figure was nearly half of the 1.2 million barrel build that was expected. Traders attributed the lower build to ramped up processing by refineries after seasonal maintenance. Additionally, imports dropped and exports rose.
Fears of oversupply will continue to hang over the market but this week’s news is…