RIYADH: Oil prices inched up on Wednesday as investors awaited the outcome of the US Federal Reserve’s June meeting.
Brent crude futures were up 38 cents, or 0.51 percent, at $74.67 a barrel by 9:00 a.m. Saudi time. US West Texas Intermediate crude was at $69.71 a barrel, up 29 cents, or 0.42 percent.
Both benchmarks climbed more than 3 percent on Tuesday on hopes of rising fuel demand after China’s central bank lowered a short-term lending rate.
Market participants expect the US central bank’s Federal Open Market Committee will pause rate hikes amid uncertainty on both the economic outlook and the lagged effects of 10 rate hikes since March 2022.
Rate hikes strengthen the dollar, making commodities denominated in the US currency more expensive for holders of other currencies, and weighing on oil prices. A pause in hikes would spur economic growth and oil demand, supporting prices.
US oil stocks increased by 1.02m barrels: Official data
Oil inventories in the US increased by 1.02 million barrels during the week ended on June 9, the latest data from the American Petroleum Institute showed.
According to the report, gasoline stocks in the US rose by 2.07 million barrels in the past week, while distillate stocks increased by 1.39 million barrels.
OPEC+ grants Russia higher production baseline
The Organization of the Petroleum Exporting Countries and its allies, known as OPEC+, granted Russia a slightly higher oil production baseline after the country agreed to work with several think tanks and agencies to review its output figures.
OPEC+ said that under the latest figures, Russia’s crude oil production has been revised to 9.949 million barrels per day for February 2023 from 9.828 million bpd previously.
“This will be considered as the updated required production for Russia for January 2024 to December 2024,” OPEC+ said.
Oil production baselines are used by OPEC to determine the levels from which production cuts are made. Russia has made its production figures classified since the West imposed sanctions on Moscow for its invasion of Ukraine.
A higher baseline means Russia can produce more under the latest quotas than previously agreed.
Equinor aims to boost Brazil oil output over next decade
Equinor plans to expand its oil production in Brazil more than fivefold over the next decade, while also eyeing green energy projects, especially in offshore wind power, an executive for the Norwegian energy giant said on Tuesday.
The company aims to boost output to more than 500,000 barrels of oil equivalent per day by 2033 from the current output of nearly 90,000 boed, Equinor Brazil Vice President Lars Jetlund Hansen said at an energy event in Rio de Janeiro.
“We have great momentum to grow more in Brazil in both oil and gas and renewables,” Hansen said.
Equinor is the second-largest oil producer in the country after state-run Petrobras, according to official data.
Hansen pointed to Brazil’s Bacalhau field, part of the Santos Basin, as Equinor’s main bet for local production growth over the next few years.
The company acquired a majority stake in the offshore field in 2016 and expects to begin pumping mostly light crude from it in 2025.
The executive said Equinor is also exploring opportunities in renewable energy in Brazil, touting good solar potential as well as offshore wind projects.
“Brazil has a lot of sun and is one of the biggest markets, and where you can grow,” said Hansen.
“We see in the offshore wind a lot of synergy with oil and gas, and we are looking at several projects,” he added.
(With input from Reuters)
