MELBOURNE (Reuters) – Oil prices rose slightly in early trade on Thursday after data showed U.S. crude stockpiles fell last week, adding to 2% gains overnight, as OPEC and its allies were seen fully complying in September with their pact to curb output.
Oil markets climbed for a third day despite a resurgence in COVID-19 infections across Europe potentially denting fuel demand.
“The energy markets are certainly marching to their own drummer at the moment,” said Michael McCarthy, chief market strategist at CMC Markets and Stockbroking, adding that recent oil price volatility may have attracted more trader positions.
The American Petroleum Institute industry group said U.S. crude, gasoline and distillate inventories all fell in the week to Oct. 9, according to a report released after market close on Wednesday.
Crude stockpiles fell by 5.4 million, while distillate stockpiles, which include diesel and heating oil, fell by 3.9 million barrels. Those drawdowns were nearly double analysts’ expectations in a Reuters poll.
The U.S. Energy Information Administration is due to release its weekly data on Thursday, a day later than normal following a public holiday.
The Organization of the Petroleum Exporting Countries (OPEC) and its allies, together called OPEC+, had 102% compliance with their agreement to cut oil supply in September, two OPEC+ sources told Reuters ahead of a meeting of the OPEC+ technical committee on Thursday to review the oil market.
ANZ Research pointed to sharp gains in China’s crude oil imports in September and buying by India’s refiners ahead of two big festivals helping support the market.
“The outlook in Asia could be the reason OPEC+ alliance remains confident the market can withstand another 2 million barrels per day in the market,” ANZ Research said in a note.
Oil prices have climbed this week despite concerns about renewed lockdowns hitting fuel demand as COVID-19 infections surge in Europe. New cases have hit around 100,000 daily, compared with more than 51,000 in the United States.
Reporting by Sonali Paul; Editing by Michael Perry
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