Oil Declines Following U.S. Inventories Draw

Oil prices fell on Wednesday after the Organization of the Petroleum Exporting Countries (OPEC) and its allies lowered their forecast for the growth of oil demand in 2021.

Brent crude futures for May delivery lost $0.60, or 0.94%, to settle at $63.54 per barrel.

Meanwhile, the U.S. West Texas Intermediate (WTI) futures dropped by $1.21, or 2%, to $59.34 a barrel.

The OPEC+ alliance’s Joint Technical Committee has lowered its expectations for the global oil demand growth this year by 300,000 barrels per day (b/d).

The revised forecasts come due to concerns about economic recovery from the impact of the coronavirus pandemic, amid its resurgence through a third wave and renewed lockdown in many countries.

Meanwhile, the global supply growth forecast was revised higher by 200,000 b/d to 1.6 million b/d.

This provides further support for the anticipated extension for the output curbs during May.

Crude oil inventories in the United States decreased by about 0.9 million barrels last week, according to the weekly report by the U.S. Energy Information Administration (EIA) released earlier today.

U.S. oil stockpiles stand at 501.8 million barrels, 6% higher than the five-year average for this time of the year.