SINGAPORE- Oil prices rose on Tuesday as key producer group OPEC undershot its expected pace of output increases last month, while the world’s top oil consumer China ramped up operating rates to meet a spike in diesel demand.
Brent crude futures gained 28 cents, or 0.3 percent, to $84.99 a barrel while US West Texas Intermediate (WTI) crude futures rose by 19 cents, or 0.2 percent, to $84.24 a barrel.
“Crude prices still seemed poised to head higher, with some traders waiting for confirmation after both the EIA crude oil inventory shows demand for most products are headed in the right direction, while US production is stable and with OPEC+ sticking to their gradual 400,000 bpd increase plan,” said Edward Moya, senior analyst at OANDA.
Oil rallied to multi-year highs last week, helped by a post-pandemic demand rebound and the Organization of the Petroleum Exporting Countries and allies led by Russia, or OPEC+, sticking to gradual, monthly production increases of 400,000 barrels per day (bpd), despite calls for more oil from major consumers.
The increase in OPEC’s oil output in October fell short of the rise planned under a deal with allies, a Reuters survey found on Monday, as involuntary outages in some smaller producers offset higher supplies from Saudi Arabia and Iraq.
OPEC pumped 27.50 million barrels per day (bpd) in October, the survey found, a rise of 190,000 bpd from the previous month but below the 254,000 increase permitted under the supply deal.
The OPEC+ agreement allowed for a 400,000 bpd production increase in October from all members, of which about 254,000 bpd is shared by the 10 OPEC members covered by the deal, OPEC figures seen by Reuters show.
With output undershooting the planned increase last month, OPEC’s compliance with its pledged cuts increased to 118 percent in October the survey found, from 114 percent a month earlier.
