Brent oil price hit over $80 a barrel on Wednesday despite a hefty rise in the US fuel stocks as the decision of the major producers of the OPEC+ to stick to the production volume in February restored investor trust about the market stability.
International benchmark Brent crude was trading at $80.38 per barrel at 1223 GMT with a 0.47% increase after closing previous session at $80 a barrel.
American benchmark West Texas Intermediate (WTI) traded at $77.31 per barrel at the same time for a 0.41% increase after it ended the previous session at $76.99 a barrel.
The rise in prices came after the 23-members of the Organization of Petroleum Exporting Countries (OPEC) and its allies, known as OPEC+, on Tuesday decided to extend the current plan to increase output by 400,000 barrels per day (bpd) through February.
In their Joint Technical Committee (JTC) meeting on Monday, OPEC+ countries stated their positive projections over the course of the pandemic saying its impact was expected to be mild and short-lived, as the world becomes better equipped to manage COVID-19 and its related challenges.
Tuesday’s decision cemented the positive outlook of the group clearing the uncertainties about supply and demand balance in the market.
The price of Brent increased despite a massive rise in the fuel inventories in the US.
According to the data by the American Petroleum Institute, the US gasoline stockpiles showed an increase of 7.1 million barrels for the week of Dec. 31, signaling a drop in demand in the world’s largest oil consumer US.
Further price drops were capped as the API also estimated that the crude oil inventories in the country declined by 6.4 million barrels during the same period.
Investors are now looking to crude oil supply data from the US Energy Information Administration due later in the day.
By Sibel Morrow