The oil price is rising Wednesday, following news a US stocks drawdown was larger than expected and that deliveries through a Canadian pipeline have been drastically reduced.
By 1130 BST, the price of Brent Crude oil had risen by over 1% to around $63 per barrel. The price of US WTI crude, meanwhile, was almost 2% higher at just below $58 per barrel.
The oil price direction has been changeable in the run up to the November 30 OPEC meeting in Vienna. However, news that stocks have fallen and won’t be added to quickly, will always affect the price of oil, regardless of other developments.
US inventories data
The weekly American Petroleum Institute (API) data are closely watched by investors and OPEC too. They give an up-to-date and transparent account of crude oil movements in the US.
The latest data show a drawdown of 6.356 million barrels of US crude oil stocks, in the week ending November 17. That reverses the build up in stocks reported in the week earlier. It was also likely noted by OPEC.
That wasn’t the only news supporting the price of oil Wednesday.
TransCanada Corp announced Tuesday, there would be an 85% reduction in the amount of oil it would transport into the US through its Keystone pipeline. The cut will last through to the end of November.
A 5,000 oil barrel spill meant the Keystone pipeline was shut last week.
OPEC meeting remains key
While the supply and stock levels of oil in the US are important drivers of the price of oil, all eyes remain on the next OPEC meeting.
The output cap that’s been in place since January this year and is set to end in March 2018, has been a significant factor in the increase in the price of oil over the year. It’s likely the cap will be extended through to the end of 2018.
However, the cap extension is not yet a done deal and investors appear a little nervous ahead of the meeting, as they await confirmation of that detail.