Oil prices edged higher Thursday with the market mood switching to relief as OPEC forecast a supply deficit in 2020, from doom and gloom over data exhibiting a surprise increase in U.S. crude inventories.
Brent futures surged 24 cents, i.e., 0.4% to $63.96 per barrel by 0242 GMT, after slipping 1% Wednesday on the U.S. stocks build-up.
West Texas Intermediate crude (WTI) was down 10 cents, i.e., 0.2%, at $58.85 per barrel, following a 0.8% plunge in the earlier session.
The OPEC Wednesday said it now expected a small deficiency in the oil industry in 2020, suggesting the market is tighter than previously deemed – even before the latest deal with other producers to hold supply takes effect.
The revised forecast by OPEC marks a further withdrawal from a prediction of excess in 2020 as U.S. production growth begins to slow.
Nonetheless, U.S. inventories are on the rise. Crude stockpiles last week rose unexpectedly, gaining over 800,000 barrels, compared with a poll that estimates a 2.8 million barrel slump.
Inventories of petroleum products additionally increased with gasoline stocks rising by over 5 million barrels and distillates, gaining a bit more than 4 million barrels.
Past the balance between inventories and supply, traders are further waiting for news on talks between the U.S. and China to end a long-running trade row and make a deal before another round of U.S. sanctions kicks in.
The lingering fight between the world’s two most prominent economies has hit the global economy, in the process of denting demand for crude and oil products.
U.S. President Donald Trump is expected to talk about tariffs on Chinese items set to be imposed on December 15 with top trade advisers as markets prepare for fallout in China’s reaction.