(Bloomberg) — Oil held gains in early Asian trading after OPEC and its allies agreed to a scheduled increase in production for next month, and an industry report pointed to another decline in inventories.
Futures in New York traded above $77 a barrel after rising 2.4% over the past two sessions. The OPEC+ alliance stuck to its plan to lift output by 400,000 barrels a day for February after it cut estimates for a surplus in the first quarter. The American Petroleum Institute reported U.S. stockpiles fell by 6.43 million barrels last week, according to people familiar with the data.
Oil has made a positive start to the year as concerns about the hit to demand from the omicron virus variant eased and major economies continue to rebound from the pandemic. The actual OPEC+ supply boost could be much less than the agreed amount as some members such as Nigeria and Angola are struggling to hit their production targets.
“The move has provided some comfort to the market, as it signals that OPEC+ are not worried about the outlook in the short term,” said Warren Patterson, head of commodities strategy at ING Groep (AS:) NV in Singapore.
U.S. gasoline stockpiles increased by 7.06 million barrels last week, while inventories of distillates — a category that includes diesel — rose by 4.38 million barrels, the API reported. Official government data is due Wednesday.
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