(Bloomberg) -- Oil climbed as Kazakhstan pledged to comply with OPEC+ production quotas and rising US crude exports signaled firm global demand.
West Texas Intermediate advanced as much as 1.9% to top $71 a barrel. US crude exports rose 1.8 million barrels last week, reaching the highest since July, according to figures released Wednesday by the Energy Information Administration. The report also showed a fourth straight weekly decline in US oil inventories and a 3.18 million-barrel drawdown in distillate stockpiles.
“Stronger exports indicate an uptick in global demand, while strong draws in distillate are a very welcome reprieve from the sluggish industrial growth that has plagued most of 2024,” said Rebecca Babin, senior energy trader at CIBC Private Wealth Group.
Oil jumped earlier on reports that Kazakhstan intends to comply with OPEC+ quotas next year. The cartel member had unsettled markets by signaling that it would adhere to its original plan of raising oil output by 190,000 barrels a day, Babin said, despite OPEC’s decision to delay production hikes.
Middle Eastern markets also have shown signs of tightness, with prices of several key grades rising, according to traders who deal with those barrels. The gain has helped to dramatically narrow the difference in price between the Asian Dubai benchmark and Brent.
Crude has traded in a narrow band for the past two months, supported by geopolitical tensions in the Middle East and Europe, and the threat of further sanctions on supplies from Iran and Russia. Restraining prices are lackluster Chinese demand and expectations for robust production from non-OPEC+ nations such as the US, where President-elect Donald Trump has promised to encourage domestic development.
Investors are counting down to the Federal Reserve’s final policy decision of the year. While a quarter-point interest-rate cut is almost fully priced in for Wednesday, investors will focus on the outlook for 2025.
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