Global oil prices extended gains Wednesday, taking Brent crude to a fresh three month high, after data indicating a steep rise in U.S. stockpiles followed steeper-than-expected production cuts from key OPEC+ members Saudi Arabia and Russia.
The Energy Information Administration said domestic crude inventories rose by a much-larger-than-expected 3.68 million barrels last week, taking the total to 450.84 million, the highest since November 2017. The figures offset forecasts for weaker demand and record U.S. supply from the International Energy Agency earlier in the session and sent prices higher in market around the world.
Brent crude contracts for April delivery, the global benchmark, were marked $1.41 higher from their Tuesday close in New York and changing hands at $63.83 per barrel, the highest since November 20 and a move that extends gains from the December 24 trough past 25%.
WTI contracts for March delivery -- which closed at the lowest level in two weeks earlier this week -- were seen $1.17 higher at $54.27 per barrel, the highest since February 4.
The IEA said Wednesday that non-OPEC members would pump around 1.8 million barrels per day this year, a 12.5% increase from its previous forecast, but left its global demand growth estimate unchanged at 1.4 million barrels per day.
The data followed a U.S. Energy Department report Tuesday that predicted domestic producers would pump a record 12.41 million barrels this year, and 13.2 million next year, as shale deposits continue to keep drillers active in world markets.
However, reports yesterday from OPEC that suggested January output fell by 800,000 barrels per day, to 30.81 million, as well as hints from Saudi Arabia that March production would slide under 10 million, added upward pressure to prices in early Wednesday trading.
Markets extended gains, as well, after Russia's Energy Minister, Alexander Novak, said February output would fall by as much as 150,000 barrels per day, compared to December totals, as it complies with the broader OPEC+ agreement on production cuts.
Further upward pressure came from yesterday's stockpile data from the American Petroleum Institute, which showed U.S. supplies fell by nearly 1 million barrels last week to 447.2 million, against expectations of a 2.4 million increase.
Part of that dip could be linked to the sanctions on the sale of Venezuelan crude into U.S. markets, which were imposed by the State Department earlier this month in response to that country's ongoing political crisis.
Venezuela's annual crude output has fallen to just 1 million barrels per day -- compared to the more than 11.9 million barrels that are pumped each day in the United States -- as the country's economic crisis prevents key investments to tap the world's biggest proven oil reserves.
U.S. oil exports account for around 40% of its total foreign sales. EIA data shows the U.S. imported around 514 million barrels per day from Venezuela last year. Last week, that figure came in at just 117,000 barrels, the EIA said, as overall commercial crude imports fell to the lowest level since January 1997.