Crude Crude markets saw a bullish session on Wednesday. At least two factors bolstered the price of oil. First, eagerly expected increase in OPEC’s production quotas did not come. Second, U.S. Department of Energy (DOE) report showed significant drop in crude stockpiles. Regarding the OPEC meeting, instead of generally expected rise in oil output, the cartel members were not able to reach a conclusion. Ali al-Naimi, Saudi Arabia’s oil minister, said that Gulf countries proposed an increase in output by 1.5 million barrels per day (mbbl/d) to 30.3 mbbl/d. But a strong opposition led by Algeria, Venezuela and Iran managed to persuaded the rest of cartel (with the exception of Nigeria) to oppose such a move. Nevertheless, Saudi’s Naimi (who said that this was one of the worst meetings ever) said afterwards that inability to reach a conclusion would not mean that the market would see a shortage and that Saudi Arabia (which holds the majority of OPEC’s spare capacity) was willing and able to deliver what was needed. Nobuo Tanaka, head of the International Energy Agency, said in a response to the meeting that crude oil prices had risen and continued to pose a threat to the global economic recovery and reiterated that the agency has “already made a call for a prompt increase in supply”. Nonetheless, Tanaka also appreciated “the constructive statements subsequently made by Saudi Arabia's Oil Minister Naimi”. As far as the DOE report is concerned, it unveiled a significant drop in U.S. crude stockpiles. Total commercial inventories dipped by 4.85 million barrels. Moreover, stocks in Cushing decreased by about 1 million barrels, which further supported the price of WTI (apart from the bullish outcome of the OPEC’s meeting). On the other hand, gasoline stocks rose by more than 2 million barrels and gasoline demand was more or less in line with last year’s number. Today, Brent is hovering at 118 USD per barrel (USD/bbl) and WTI is trading in sight of 101.5 USD/bbl.

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