As China boost’s its operating rates to meet an increase in diesel demand, oil prices on the other hand rise again as key producer group OPEC undershot its expected pace of output increases last month.
According to reports, brent crude futures increased by 28 cents, or 0.3%, to $84.99 a barrel by 0744 GMT, while America’s West Texas Intermediate (WTI) crude futures rose by 6 cents, or 0.1%, to $84.11 a barrel.
Last week, oil prices rallied to multi-year highs. This was due to a post-pandemic demand rebound and the Organization of the Petroleum Exporting Countries (OPEC) and allies led by Russia, or OPEC+, sticking to gradual, monthly production increases of 400,000 barrels per day (bpd).
OPEC+, in 2020 has cut output by 9.7 million barrels per day or about 10% of daily demand. Despite calls for more oil from the United States and other consumers, it has been sticking to gradual, monthly production increases of 400,000 bpd.
According to a Reuters survey, OPEC’s increase in oil output from last month fell short of the rise planned under a deal with allies. This was due to involuntary outages from smaller producers in Saudi Arabia and Iraq offsetting higher supplies.
In October alone, OPEC pumped 27.50 million barrels per day (bpd), a significant rise of 190,000 bpd from the previous month, but below the 254,000 increase permitted under the supply deal.
In the meantime, China’s national oil firms are boosting its refinery run rates. Thus increasing its appetite for crude oil, and to avert a diesel shortage in the world’s second-largest oil user.
A preliminary Reuters poll showed that last week the U.S. crude oil stocks may have risen, while gasoline and distillate inventories were seen falling.
While, according to a CNBC report, Saudi Aramco, the Saudi Arabian petroleum and natural gas company mentioned its net profits to rise double during the third-quarter, more than its expectations.
The company logged in a 160 percent increase in net income, huge profits that defied what analysts had predicted. The same has been credited to spiking crude oil prices and higher sales.