The rise in inventories continues, and attention is turning to OPEC+ members which have tightened supply, pushing Brent, WTI and Shanghai future up by 4.15%, 3.13% and 2.95%, their highest in 3 months. US sanctions against Venezuela’s oil giant PDVSA is causing supply shortages while US refineries scramble to find alternative supplies. A December pledge from OPEC + to cut output by 1.2 million barrels per day is taking effect. Saudi Arabia made the largest cut, estimated at 450’000 bpd. A technical problem at its offshore Safaniyah field, where production can reach up to 1.5 million bpd, should be fixed in March. Russia’s vow to decrease production by 228’000 bpd by May should also support prices. Still, the macroeconomic outlook remains bearish in the medium-term. Weakening economic growth in the US, EU and Asia and a continued rise in US crude output should maintain Brent prices in a range of USD 60–70 in the coming months. Currently trading at 64.75, Brent is heading along USD 65 short-term.
By Vincent Mivelaz