Oil prices rose early on Wednesday, supported by a renewed commitment of OPEC and its de facto leader and biggest producer Saudi Arabia to cut deeper than pledged and do 'whatever it takes' to rebalance the market.
At 08:17 a.m. EST on Wednesday, WTI Crude was trading up 0.77 percent at $53.51, while Brent Crude was up 0.72 percent at $62.87.
In early Wednesday trade, oil prices were also supported by Tuesday's report of the American Petroleum Institute (API) which showed a small crude oil inventory draw of 998,000 barrels for the week ending February 8, compared to analyst expectations that predicted a build in crude oil inventories to the tune of 2.300 million barrels.
Last week, the API reported a surprise crude build of 2.514 million barrels. A day later, the EIA confirmed the inventory build, but a smaller one at 1.3 million barrels.
The EIA is set to release the weekly inventory report later on Wednesday, while in its Short-Term Energy Outlook (STEO) for February, the EIA said on Tuesday that "After two consecutive months of price declines, crude oil prices increased throughout January and into February as global oil supplies declined relatively quickly."
The production cuts from OPEC and its non-OPEC allies, the Saudi overcompliance with the cuts and the pledge to cut even deeper next month, the unplanned outage in Libya's Sharara oil field, and the reduction in Alberta's production are tightening global oil supply, according to the EIA.
The latest STEO expects total global petroleum inventories to decline by 1.3 million bpd in February, the largest drop since November 2017. The EIA, however, added a note of caution that U.S. production would be capping oil price gains.
"Despite the forecast global oil inventory draws in February and lower forecast OPEC crude oil production in 2019 compared with the January STEO, EIA forecasts that U.S. crude oil production growth will offset decreases in OPEC production throughout the forecast."
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. More