WTI oil rose in price to the level of $70.15 per barrel.
Commercial oil reserves in the United States increased by 2.1 million barrels over the past week, the US Department of Energy reported. At the same time, analysts surveyed by Bloomberg expected a reduction in inventories by 4.5 million barrels. In addition, the price of oil continues to recover after the collapse on Monday by almost 7%. Then the quotes fell after the announcement of the results of the OPEC+ meeting, during which the alliance decided to extend the deal until the end of 2022, as well as to increase production by 400,000 barrels per day monthly from August 2021.
Such a relaxation means that the OPEC+ deal will be reduced to almost zero in about a year. By that time, the total production volumes will be equal to the average, which were recorded a few months before the pandemic. In the meantime, by the end of this year, the level of production reduction should decrease from the current 5.76 million barrels per day to 3.7 million barrels in total for all parties to the agreement.
The main result of the Vienna meeting in July 2021, oil market analysts believe that none of the parties to the agreement opposed the preservation of the mechanism for coordinating the levels of raw material production in force. The Vienna agreements also do not cancel the very possibility of introducing, if necessary, new restrictions on production. In addition, representatives of Saudi Arabia made it clear that in case of uncoordinated actions of any of the OPEC+ participants, they reserve the right to maneuver their own production volumes more actively than before.
In our forecast, we assume an increase in the price of WTI oil to the levels of 70.3, 70.5 and 70.8 dollars per barrel.