Oil prices made a modest recovery on Thursday on the expectations that OPEC+ may delay planned production increases and the drop in U.S. crude inventories.
Brent crude oil, against which Nigerian oil is priced, rose by 66 cents, or 0.9% to $73.36 per barrel while U.S. West Texas Intermediate (WTI) crude appreciated by 64 cents or 0.9% to $69.84 per barrel.
The rebound in oil prices was a result of the American Petroleum Institute (API) report that revealed that the U.S. crude oil inventories had fallen by a surprising 7.431 million barrels last week, against analysts 1 million barrel decline projection.
The decline signals better than projected demand for the commodity in the United States of America and offers some relief for traders on global demand.
John Evans, an analyst at PVM Oil Associates, attributed the rebound in crude oil prices to the API report.
He said, “There is a pause of breath and light reprieve for oil prices.”
Also, discussions within the Organization of the Petroleum Exporting Countries (OPEC) and its allies, collectively known as OPEC+, are fueling speculation about a potential delay in planned output increases.
The group was initially expected to increase production by 180,000 a day in October 2024.
However, concerns over softening demand in China and potential developments in Libya’s oil production have prompted the group to reconsider its strategy.
Despite the recent rebound, analysts caution that lingering uncertainties around global oil demand may continue to weigh on prices in the near term.
