US Crude oil inventories reduced -5.2 million barrels on Wednesday beating analysts’ forecasts of 2.2 million barrels surplus. Oil prices have been through rough turbulences this year, tanking to lows of $26 in February and spurting up to today’s highs of $52.21 per barrel. It was expected at this time of the year for crude production to fall due to yearly maintenance repairs, thus naturally limiting oil yields.
Currently many factors are fuelling the steady rise of crude oil. Helped by China’s oil output reducing 9% in the month of September and OPEC. I believe OPEC’s ultimate plan will only work if all OPEC and non OPEC members are willing to participate and co-operate together as a unit. Saudi Arabia energy minister Khalid al-Falih said that “Market forces are clearly working after a testing period of sub-$30 oil prices… Oil demand is expanding at a healthy rate despite slower global growth”. He later said that he was hoping more non OPEC countries can be more active in maintaining the momentum for crude oil. Russian energy minister Alexander Novak is hoping to discuss more with Al-Falih this week.
Investors will be on high alert when OPEC are assembling on November 30th to further outline its policy. But without concrete commitment from other big players like Iran and Nigeria, traders should remain cautious.