Oil Mixed, but Holds Strong as Investors Await OPEC+ Reaction

Oil prices were mixed on Thursday morning in Asia as investors watch how major producers will react to emergency crude releases by major consumer nations to cool the market.

Brent oil futures inched up 0.07% to $82.31 by 11:31 PM ET (4:31 AM GMT) while WTI futures inched down 0.06% to $78.34.

“The coordinated SPR (Strategic Petroleum Reserve) release may end up as a near-term political win for the parties involved, however, we do not expect it to have a lasting impact on crude fundamentals,” said Fitch analyst Jake Leiby in a note.

“But the bigger picture is that product demand remains healthy, adding pressure to a tightening market,” stated Capital Economics economist Kieran Tompkins (NYSE:TMP) in a note.

All eyes are now on the Organization of the Petroleum Exporting Countries and allies, or OPEC+, as it meets next week to discuss oil demand and supply.

“The bold move from the oil importers has opened the door wide open for OPEC+ to adjust its supply policy downwards at its next meeting on 2 December 2021,” Rystad Energy analyst Louise Dickson told Reuters.

OPEC+ has been adding 400,000 barrels per day of supply each month, undoing the major output reductions from last year when the COVID-19 pandemic slowed demand.

Three sources told Reuters that the cartel is not discussing pausing its oil output increases, despite the coordinated release.

Investors are also watching out if China will release oil from its reserves as planned.

Meanwhile, Wednesday’s U.S. crude oil supply data from the U.S. Energy Information Administration (EIA) showed a build of 1.017 million barrels for the week ended November 19. Forecasts prepared by investing.com predicted a draw of 481,000 barrels, while a draw of 2.101 million barrels was reported during the previous week.

Crude oil supply data from the American Petroleum Institute from the day before showed a build of 2.307 million barrels.