Oil Holds Gain With Focus on US Stockpiles and OPEC+ Meeting

Oil held a rally after an industry report pointed to a drawdown in US crude inventories, ahead of an OPEC+ meeting at which the group is expected to affirm current supply cuts, Bloomberg reported.

Brent crude was near $89 a barrel after closing at the highest level since October on Tuesday. West Texas Intermediate was around $85.

The American Petroleum Institute reported nationwide stockpiles fell by more than 2 million barrels last week, according to people familiar with the figures. The estimates — before the release of official data due later on Wednesday — also showed declines in gasoline and distillate inventories.

OPEC and its allies are due to review crude markets and supply policy at an online gathering on Wednesday. Officials from member nations predict they’ll keep their overall strategy unchanged.

Crude has pushed higher this year, with Ukrainian attacks on Russian energy infrastructure and Middle East tensions supporting prices. OPEC’s curbs have been tightening the market, even though some members have stalled on delivering their agreed-upon cuts in full and as Russian exports surge.

“With OPEC+ already extending its voluntary production cuts until mid‑year, the virtual OPEC+ meeting later today will likely just reaffirm the group’s current policy,” said Vivek Dhar, an analyst at Commonwealth Bank of Australia. “Brent oil futures should track closer to $75 to $80 a barrel in coming months given our view that China’s oil demand growth will disappoint.”

Meanwhile, oil options markets are more bullish, with traders increasingly looking to protect against rising prices. Brent’s second-month options skew has flipped from its usual put skew — favored by producers seeking to protect against price drops — to the opposite bias for calls. That comes as timespreads move further into backwardation, another indicator of strength.