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20/1/7_Decreasing US oil reserves and cuts in Saudi Arabia’s oil production

Oil prices rose nearly 1% on Thursday after declining US inventories and the decision of Saudi Arabia, the world’s largest exporter, to cut production over the next two months.

 

There was also an attack on the US Capitol. It was not entirely clear what effect the attack on the Capitol by President Donald Trump’s supporters would have on the oil markets, although some analysts believe that the administration of newly elected President Joe Biden will dampen oil production in the United States.

 

Brent crude rose 44 cents (+ 0.8%) this morning to $ 54.74 a barrel. It thus continued its overnight growth of 1.3%. US West Texas Intermediate Oil (WTI) rose 51 cents (+ 1%) to $ 51.14.

 

Saudi Arabia, the world’s largest oil exporter, said it would voluntarily cut production by 1 million barrels a day (bpd) in February and March. This happened after the OPEC + meeting, which brings together the Organization of the Petroleum Exporting Countries and other producers, including Russia.

 

Edward Moya, senior market analyst at OANDA, said: “It seems that WTI oil will rise higher because:

  • The Biden government will cut oil production in the United States.
  • The Saudis are cutting oil production by 1 million bpd and tentatively allaying fears of oversupply.
  • The days of the dollar seem to be numbered”

 

US oil reserves have fallen, but fuel stocks have risen, the Energy Information Administration said on Wednesday.

 

Oil stocks fell 8 million barrels to 1,485.5 million barrels in the week to January 1, according to a Reuters survey, according to which analysts expected a drop of 2.1 million barrels.

 

The decline in oil stocks is typical at the end of the year, when energy companies unload oil to avoid tax bills.

 

The steady rise in WTI oil prices may result in the resumption of US production.

 

Source: Reuters.com

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