US EIA Crude Oil Inventories preview: Oil eases back with OPEC+ in focus today

Oil prices were a tad softer Wednesday having struck 5-month highs in the previous session with traders looking ahead to today’s EIA inventories, which are complicated by the OPEC+ meeting also taking place. Prices remain supported by ongoing optimism about the economic recovery with equity markets striking fresh record highs on Wall Street.  

API draw  

The American Petroleum Institute (API) reported a draw in crude oil inventories of 4.264 million barrels last week, which beat expectations for a fall of 2.67m barrels. Market participants today expect the EIA to show a draw of –2.9m barrels, a smaller drop than last week’s -4.5m. 

OPEC+ meeting 

Today’s inventory figures come on the same day as the OPEC+ Joint Ministerial Monitoring Committee, which is set to reaffirm the 7.7m bpd cuts.  

It follows OPEC’s latest monthly report, published last week, which indicated the cartel will continue with production cuts for longer. OPEC lowered its 2020 world oil demand forecast, forecasting a drop of 9.06m bpd compared to a drop of 8.95m bpd in the previous monthly report. But the report also sought to calm fears that OPEC+ will be too quick to ramp up production again. Specifically, OPEC said its H2 2020 outlook points to the need for continued efforts to support the market.