Quick Brief - Oil prices rebound after unexpected drop in gasoline stockpiles
- US gasoline stockpiles drop to a two-year low
- OPEC+ could delay a planned production increase
- Chinese manufacturing PMI also a helping hand
Oil prices rebounded on Thursday, perhaps buoyed by demand optimism in the US after gasoline stockpiles dropped unexpectedly to a two-year low last week, according to the Energy Information Administration (EIA).
What may have also encouraged investors to buy more oil were reports that OPEC and its major allies, known as the OPEC+ group, could delay a planned production increase for December due to rising supply and demand worries.
An official announcement to postpone action is yet to be made though and according to media reports, it could come as early as next week. The group was scheduled to raise output by 180k bpd in December.
The better-than-expected manufacturing PMI from China, the world’s top crude importer, is also a positive development as the sector has entered expansionary territory for the first time since April.
Yes, the geopolitical risk premium has been reduced after Israel did not hit Iranian refineries over the weekend and after Lebanon’s prime minister expressed hopes that a ceasefire deal with Israel could be announced within days, but the aforementioned developments suggest that yesterday’s recovery may continue for a while longer, perhaps until WTI tests once again the key territory of 72.70.
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