Jessica Jaganathan

SINGAPORE (Reuters – Oil prices rose as OPEC, a major producer, fell short of its expectations for output growth last month. China however was the largest oil consumer in the world and increased its operating rates to cope with a rise in diesel demand.

By 0117 GMT futures had gained 0.3% or 28 cents to $84.99/barrel, and U.S. West Texas Intermediate(WTI) crude futures rose 0.2% or 19 cents to $84.24/barrel.

OANDA Senior Analyst Edward Moya stated that crude prices were still poised for higher. Some traders are waiting to confirm after EIA’s crude oil inventory indicates demand is heading in the right directions, and U.S. Production remains steady with OPEC+ adhering to their gradual 400,000 bpd rise plan.

Last week saw oil rise to new multi-year highs. This was due to a rebound in post-pandemic consumer demand and the Organization of the Petroleum Exporting Countries (or OPEC+) sticking with gradual monthly production increases of 400,000 barrels/day (bpd), despite the calls from major buyers for more.

A Reuters survey revealed that OPEC’s October increase in oil production was less than the planned rise under a deal made with its allies. This is because involuntary outages at some of smaller producers partially offset increased supplies from Saudi Arabian and Iraq.

According to the survey, OPEC pumped 27,50 million barrels of oil per day (bpd), an increase of 190,000. bpd compared with the previous month, but still below the 254,000 permit under the supply contract.

To avoid a shortage of diesel in China, China’s national oil companies have increased their refinery runs rates.

Oil stocks are expected to rise last week while gasoline inventories and distillate inventories fell, a preliminary Reuters poll revealed on Monday.

The survey was taken ahead of reporting from the American Petroleum Institute on Tuesday and EIA on Wednesday, which are statistical arms of the U.S. Department of Energy.