The crude oil prices declined on Thursday after a surprise increase in oil inventories in USA. The American Petroleum Institute reported that inventories grew by 4.2 million barrels in the week to December 23, beating the forecasts of analysts for a decline of 2.1 million barrels. Later today is expected the official report of the Energy Information Administration. But the overall trend appeared to be upwards with oil producers committed to agreed output cuts.
The US light WTI crude depreciated by 0.55% to 53.76 USD per barrel and the price of European Brent oil fell by 0.14% to 56.88 USD per barrel.
The trade expected this week to remain weak as most investors have already closed their positions before the start of the new 2017. Today usually expire futures contracts for Brent in February, which could lead to some movement in the market.
Both crude oil benchmarks have made big gains this month since OPEC and other producers agreed to curb production in an attempt to balance an oversupplied fuel market. The market is in good shape although it might fail to make significant advances this year.
Meanwhile it became clear that the special committee of OPEC countries and those outside the group, which will monitor compliance with the agreed cuts in production, will meet in Vienna on January 21 and 22. This was announced by Minister of Oil of Kuwait’s Essam al-Marzouk.
Brent will be positively influenced by the deal between OPEC and Non-OPEC if the quota is largely respected in the next six months. The spread between WTI and Brent will continue to expand if the initiative between OPEC and other major producers to rebalance the market work if shale extraction in North America continues to increase.