WTI Crude Oil Fell Dramatically
In the weekly review of the Energy Information Administration of the US Department of Energy, oil production in the country over the past week did not change and remained at the level of 10.9 million barrels per day. The Ministry of Energy also raised the forecast of average oil production in the country in 2021 to 11.15 million barrels per day. Commercial oil reserves in the United States increased by 2.4 million barrels over the past week. At the same time, analysts polled by Bloomberg had expected an increase in inventories by 2.7 million.
The report of the International Energy Agency says that the participants in the OPEC+ oil production reduction deal in February fulfilled their obligations by 112%. Russia, according to the IEA, fulfilled the deal by 93% in February, with production of 9.26 million barrels per day. At the same time, OPEC countries met their quotas by 125%, and non-OPEC countries-only by 89%. In April 2020, the alliance agreed to reduce oil production after demand fell by a quarter due to the global crisis. The decision was made immediately for two years, but with a gradual increase in production.
At the beginning of 2021, the OPEC+ countries ' positions on the strategy regarding production levels since February diverged. Most of the participants of the organization spoke in favor of maintaining the January level of restrictions, while Russia and Kazakhstan supported a gradual increase in production. As a result, a compromise decision was made – all OPEC+ countries maintain the January levels of restrictions for February and March, except for Russia and Kazakhstan. The overall overperformance of the deal in February means that less oil hit the market than planned, and this supports the current uptrend.