Oil prices held steady on Tuesday as OPEC fell short of expected output growth last month and China, the world’s largest oil consumer, increased operating rates to meet rising diesel demand.
Brent crude futures were up 3 cents to $84.74 a barrel as of 0507 GMT, while West Texas Intermediate (WTI) crude futures fell 7 cents, or 0.1 percent, to $83.98 a barrel.
Crude prices are still expected to continue rising after the EIA crude inventory shows demand for most products is heading in the right direction, US production remains stable and OPEC+ adheres to a gradual increase of 400,000 bpd.
Oil soared to multi-year highs last week, aided by a recovery in post-pandemic demand and the continued commitment of the Organization of the Petroleum Exporting Countries and its Russia-led allies to gradual, monthly output increases of 400,000 bpd despite demand for more oil from major consumers.
OPEC’s increase in oil production in October lagged behind the planned increase under a deal with the Allies, as involuntary cuts in some smaller producers offset higher supply from Saudi Arabia and Iraq.
OPEC pumped 27.50 million barrels per day (bpd) in October, an increase of 190,000 bpd from the previous month, but below the 254,000 barrel per day increase allowed under the supply agreement.
Meanwhile, national oil companies in China have fueled appetite for crude by increasing refinery run rates to avert diesel shortages in the world’s second-largest oil user.
According to surveys, US crude oil inventories were expected to rise last week, while gasoline and distillate stocks fell. The surveys were preceded prior to the reports from the American Petroleum Institute (API) on Tuesday and the EIA, the statistical arm of the U.S. Department of Energy, on Wednesday.
