Oil prices traded higher on Thursday in Asia as the Organization of the Petroleum Exporting Countries (OPEC) revised its deficit forecast for next year.
In a report released overnight, OPEC said it now expected a small deficit in the oil market in the next year, suggesting the market is tighter than previously thought.
The revised forecast by OPEC marks a further retreat from a prediction of a glut in 2020 as U.S. production growth begins to slow.
Oil prices were trading lower earlier in the day after the U.S. Energy Information Administration reported that crude inventories rose by 822,000 for the week ended Dec. 6, comparing with a drawdown of 2.76 million barrels, according to analysts’ forecasts compiled by Investing.com.
Gasoline Inventories soared by 5.4 million barrels, compared with expectations for a rise of about 2.5 million barrels. That was the largest weekly build in gasoline since January, according to EIA records.
Distillate inventories, meanwhile, climbed by 4.1 million barrels, versus forecasts for a build of about 1.6 million barrels.
“It appears once again that refiners are turning out products at a frenetic pace that the market probably doesn’t need and that explains the continuous builds in gasoline and distillates that we’re having,” Investing.com analyst Barani Krishnan said.
“Refinery runs are continuing at over 90% of standing capacity,” Krishnan added. “The drawdown of nearly 3.5 million barrels at the Cushing Oklahoma delivery point for WTI clearly shows the blistering pace of refining that’s going on.”