Investing.com – Oil prices gained in Asia on Wednesday ahead of US industry weekly estimates on crude and refined product inventories and overcoming dips overnight.
On the New York Mercantile Exchange WTI crude futures for January delivery rose 0.28% to $63.91 a barrel, while on London’s Intercontinental Exchange, Brent gained 0.06% to $69.33 a barrel.
Overnight, prices eased from three-year highs on profit taking but remained well supported amid expectations OPEC-led output curbs would further tighten global supplies offsetting rising US production.
It what was a thin trading day, following the Martin Luther King holiday Monday, oil prices fell as traders took profit on the recent rally which saw both and WTI crude prices hit three-year highs supported by rising global demand growth and OPEC’s ongoing commitment to the output-cut pact.
“We see that the market is becoming balanced. We see that the market surplus is decreasing, but the market is not completely balanced yet,” he told reporters. “Of course, we need to continue monitoring the situation,” said Russian Energy Minister Alexander Novak.
Rising US oil production, however, remains a concern for investors as data last week showed the number of U.S. oil rigs drilling for oil, an early indicator of future production, rose by 10 to 752, its highest level in more than four months.
Production has yet to rise above 10 million barrels per day (bpd) as data on Friday showed US oil production dropped by the most since October as the “bomb cyclone” winter storm disrupted output.
That said, however, sentiment on oil prices at current levels remains positive as Morgan Stanley (NYSE:) raised its Brent forecast for the third quarter of 2018 to $75 per barrel, up from $63 per barrel.
“With many equity markets at all-time highs, interest rates still low, and oil prices lagging their usual correlation with inflation this is should keep oil futures well underpinned,” said Morgan Stanley in a note to clients.
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