Meanwhile, Iran promises "good thing" for its oil sales soon: File Image/Pixabay
The Organization of the Petroleum Exporting Countries (OPEC) and its allies sticking to a plan to ease oil restrictions helped build market confidence on Wednesday, with West Texas Intermediate climbing a modest 0.13 percent (however, Brent declined 0.47 percent).
Also lending support was Energy Information Administration data showing that U.S. crude inventories declined by 7.2 million barrels last week, a larger drop than had been reported by the American Petroleum Institute.
Additionally, total oil products supplied, which is a proxy for demand, rose to its highest in data going back to 1990.
Market fundamentals have strengthened and OECD stocks continue to fall
John Kilduff, founding partner at Again Capital, remarked, "The declines are getting erased because the market is putting more emphasis on the bullish report rather than the OPEC+ announcement which was anticipated."
OPEC ministers on Wednesday agreed to abide by the 400,000 barrel per day (bpd) supply hike scheduled for October after less than an hour of talks, one of the quickest meetings in recent memory; a statement from the cartel read, "While the effects of the COVID-19 pandemic continue to cast some uncertainty, market fundamentals have strengthened and OECD stocks continue to fall as the recovery accelerates."
In other oil related news on Wednesday, Enbridge is offering 620,000 bpd of capacity in its Line 3 oil pipeline in October, according to a notice to shippers; Line 3 is the first new cross-border oil-sands conduit built between Canada and the U.S. in years.
Meanwhile, Iran vowed to increase its oil exports soon despite U.S. sanctions still in place and the prospect of a U.S./Iran nuclear deal still far off: Javad Owji, oil minister for the Islamic republic, told media on Wednesday that "I promise good things will happen regarding Iran's oil sales in the coming months."
Despite Tehran not disclosing export data, assessments based on shipping and other sources suggest Iran has experienced a fall from about 2.8 million bpd in 2018 to as low as 200,000 bpd.