Crude oil prices are gaining some momentum in Asian trade on Wednesday, supported by Saudi Arabia’s supply curtailment for Asian customers. Recently, Saudi Arabia informed its Asian customers about possible cuts in supplies in the next few months, but traders are concerned amid a lack of details. In addition, an expected growth in U.S. oil supplies and inventories is also weighing on crude oil prices.
Brent crude oil prices were trading around $54.00 per barrel in Asian trade, up 36 cents from their last settlement. WTI crude oil was trading at $51.15 a barrel, increased 33 cents compared with the recent close.
Crude oil prices plunged more than 6% in the first two trading sessions of this week, impacted by the growth in Iraqi and Iranian exports. Iran sold almost 13 million barrels of crude oil held in tankers at sea in the last three months. On the other hand, Iraq, the second-largest OPEC producers, exported 3.53 million barrels of oil per day from the southern Basra port in the last month.
In addition, Iraq expects to export 3.641 million bpd of crude from the southern Basra ports next month, higher than the recent record level of 3.53 million bpd in December.
U.S. crude oil inventories are likely to increase for the last week, considering analysts’ estimate for the build of 1.4 million barrels. In addition, North American output is expected to grow at a faster pace in the coming months, thanks to a steady growth in rig counts.
Recently, the U.S. government announced plans to sell up to 8 million barrels of oil from its Strategic Petroleum Reserve. In a monthly report released on Tuesday, the Energy Information Administration anticipated U.S oil production to stand above 9 million barrels a day by the end of this year. Overall, increasing U.S. oil output is a big threat to the potential growth in crude oil prices.